Over S$27.5b invested in Marina Bay from private and public sector

Source : Channel NewsAsia – 29 Jul 2009

More than S$27.5 billion has been invested so far in the new business and financial district in Marina Bay and the government is planning to pump in a further S$1 billion in infrastructure works there over the next 10 to 15 years.

Singapore’s National Development Minister Mah Bow Tan announced this at the topping out ceremony for the construction of the Marina Bay Financial Centre on Wednesday morning.

He also said there are some signs of speculation in the recent frenzy in the property market.

The government announced in April that Marina Bay had attracted total investments of over S$22 billion of which S$5.7 billion was from the government, and S$16.5 billion was from the private sector.

And just three months later, that figure, which includes government and private sector investments, has risen to over S$27.5 billion.

The Urban Redevelopment Authority said the increase of S$1.8 billion in government investment is largely due to higher construction costs for the Marina Coastal Expressway.

It said more funds are also being pumped in by various developers for their projects which has seen private investments grow by over S$3.5 billion.

The new financial district is expected to generate quality office space to rival those in Tokyo, New York and London.

And the manager of the Marina Bay Financial Centre said more companies have been expressing interest in leasing office space in the area despite the recession.

Wilson Kwong, general manager, Raffles Quay Asset Management, said: “At the moment, phases 1 and 2, for the office section, it is 61 per cent pre-committed.

“Anchor tenants at the Marina Bay Financial Centre include Standard Chartered Bank, which is taking up 500,000 square feet, and DBS, which is taking up 700, 000 square feet. All in all, the Marina Bay Financial Centre will offer nearly 3 million square feet of office space.”

Speaking to reporters at the topping out ceremony for the centre, Singapore’s National Development Minister Mah Bow Tan also commented on the recent property market frenzy.

He said it’s unclear what is driving the demand.

According to figures published by the Urban Redevelopment Authority, about 7,000 uncompleted private residential units were sold by developers in the first half of this year.

That already surpasses the roughly 4,200 units sold for the whole of last year.

Mr Mah said: “Its a bit early to say whether there is a speculative bubble or property bubble building up. Obviously it is not in everybody’s interest for such a bubble to form because if it does, and when the bubble bursts, which it inevitably must, then a lot of people will get hurt.

Mr Mah said he is unsure whether the current demand is sustainable as Singapore’s economy is still expected to contract this year.

He said: “For a market to be healthy, the demand must be based on certain economic fundamentals so if you look at the economic fundamentals today, you will see that there is still uncertainty.”

Mr Mah stressed that there is sufficient supply and he urges buyers to study the figures carefully before making any decisions. There are currently 38,000 unsold residential units in Singapore and there is going to be more coming onstream.

And this number is not inclusive of public housing.

The government will be putting out more information through the Urban Redevelopment Authority website to help buyers make informed choices.

Mr Mah also said the government is prepared to inject more supply through the government land sales programme if necessary.

The government will be studying the land sales programme for 2010 in the months ahead.

For this half of the year, the figure is already fixed.

Mr Mah also said that the government is prepared to bring back the Confirmed List on the government land sales programme in future if there is a need to increase supply.

Earlier in June, it was announced that Singapore will suspend the Confirmed List of the Government Land Sales programme for another six months due to the market downturn.

But it is not just private property that is seeing a demand surge, sales of five- room flats also rose 80 per cent to 2,713 units over the first quarter of this year.

When asked about this sales figure, Mr Mah said he is unsure if it is long term demand for bigger flats.

He said sales of larger flats were actually low for many years and what’s happening now could be a rightful correction.

Mr Mah added there will be more 4-room than 5-rooms flats put up for sale in the next build-to-order project.