URA opens two sites for tender

Source : Today - 20 Nov 2008

AS THE slump in demand for state land continues, the Urban Redevelopment Authority (URA) opened applications yesterday for two sites on the reserve list.

Prior to yesterday, only one out of the 20 sites on this year’s reserve list on which sites have to receive an acceptable bid to trigger the tender process had been sold.

And analysts Today spoke to expect the latest land parcels at Dakota Crescent and Seletar Road respectively to be similarly left on the shelf for some time.

Said Chesterton SuntecInternational director Colin Tan:”I think URA is just going through the motions … There’s no point talking about (the attributes of) any site now. Everything looks a bit gloomy now.”

Located beside the Geylang River, the 1.7-hectare site at Dakota Crescent designated for residential development sits on the fringe of the city and near the future Singapore Sports Hub. It can generate a maximum permissible gross floor area (GFA) of about 60,164 sq m.

The land parcel at Seletar Road is earmarked for a mixed commercial and residential development. Situated at the junction of Yio Chu Kang Road and Seletar Road, the 2.1 ha site has a maximum permissible GFA of about 29,400 sq m.

The market has turned drastically in recent months. With banks reluctant to lend, developers also face difficulties in offloading properties on their hands amid sluggish sentiments.

As such, any application is unlikely, much less a bid that would meet the URA’s pre-determined and undisclosed level. Said Mr Tan: “I cannot see developers pouring money into something when they are not selling.”

Knight Frank research director Nicholas Mak added that developers are also wary that market conditions would turn worse next year.

Said Mr Mak: “When developers buy sites, they do so based on future demand … At this point in time, the chances of these sites being triggered for tender is slim, at least for the rest of this year. Everybody is expecting a downturn, nobody would be rushing in to buy the land.”

The uncertain market conditions saw the Government put the brakes on its land sales programme on Oct 31. Among other measures, it moved most of the land sites on its confirmed list on which sites are released for tender without the need for a price trigger to the reserve list.

In addition to the Dakota Crescent and Seletar Road sites, four more sites on the reserve list are due to be made available for sale by the end of the year.

Responding to Today’s queries on whether it expects to receive any bids for the Dakota Crescent and Seletar Road sites, a URA spokesman said the Government “does not speculate on the bids to be received for the Reserve List sites”. She reiterated that the reserve list system was a “market-led approach whereby a site will only be released for sale if an interested party submits an application with a minimum price that is acceptable to the Government”.