By Mr Desmond Sim (沈振伦), Head of Research, Southeast Asia, CBRE
Calibration of supply
- Three new residential sites were added to the Confirmed List, with another site added to the Reserve List.
- The tenders for two sites on the 1H 2020 Confirmed List had been extended to October 2020 to provide developers with more time to assess market conditions. Similarly, the Confirmed List sites launching in the last quarter of the year will also have a longer tender period of six months.
- Should any developer want to acquire land for commercial use, they can trigger sites on the Reserve List.
Residential
With a build-up of unsold units from launched projects (4,506 units in 1Q 2020 from 4,389 units in the previous quarter), the number of residential units introduced on the Confirmed List has been on the decline since 1H 2019 in the aftermath of the en bloc frenzy.
A total of 1,370 residential units were proposed for the Confirmed List of GLS in 2H 2020, the lowest since 1H 2016 when 1,560 units were offered.
All three sites on the Confirmed List are new sites, with an EC site at Tengah Garden Walk. The two residential sites at Northumberland Road and Ang Mo Kio Avenue 1 offer developers options in mature housing estates. On the Reserve List, all three residential sites were from the 1H 2020 Reserve List, with the addition of a site at Lentor Central featuring commercial component.
Commercial
As none of the commercial sites were triggered from the 1H 2020 Reserve List, the same sites have been rolled over to 2H 2020, with no commercial sites introduced in the Confirmed List.
CBRE Research Views – Overall
Overall, the measured supply in the 2H 2020 GLS Programme is not surprising against the backdrop of the COVID-19 pandemic. This is a degustation menu as the Confirmed List presents palatable sites with smaller units but with greater variety in terms of location. Should any developers’ appetite for land be unsatiated, they can still order from the Reserve List.
While unsold inventory appears to be under control, there has been some headwinds on unit sales under current show flat restrictions imposed by the government, especially during the “circuit breaker” period.
Nonetheless, the GLS Programme is a retrospective programme for the future needs of developers. It is revised twice every year. At the same time, this GLS Programme has provided indications on new development nodes which may sprout out from future infrastructure completions (e.g. the site along Ang Mo Kio Ave 1 which is in proximity to the upcoming Mayflower MRT station, served by the Thomson-East Coast Line).
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