The growth of investments in Singapore, the GLS tender launch of the Tanah Merah Kechil Link site and Singapore's Fortitude Budget. Colliers' thought-leaders weigh in on this week's property news highlights.
Singapore secured S$13 billion in investment commitments from January to April this year, already exceeding the Singapore Economic Development Board's (EDB) full-year projection of S$8 billion to S$10 billion, Minister for Trade and Industry Chan Chun Sing said in a media interview on Saturday.
The investments, in areas such as electronics and infocomm media, are expected to generate a few thousand jobs in the coming years, said Mr Chan.
Secured despite the ongoing Covid-19 crisis, these long-term investments reflect the sustained confidence that many major investors and businesses have in Singapore, he added. "Throughout the crisis, we have been known as a safe harbour".
Jerome Wright, Senior Director, Capital Markets & Investment Services:
The ongoing investment is a reflection of the importance Singapore represents in the region, as one of its leading gateway cities. With technology, electronics, energy and chemical sectors receiving significant investment, coupled with the continued growth of E-commerce and the technology, media and telecommunications (TMT) sector, we expect to see strengthening demand in the central business district, and fringe office requirements post-COVD-19.
We can also expect increase in real estate investment - as reflected in our latest report across these sectors - towards the end of the year and into 2021, as we progress through the different phases of the safe re-opening and management measures.
A land parcel at Tanah Merah Kechil Link, slated for residential with commercial use on the first storey, is now up for sale by public tender.
The Urban Redevelopment Authority (URA) launched the tender on Thursday, under the confirmed list of the first half 2020 government land sales (GLS) programme.
The site can potentially yield about 265 residential units and has a lease period of 99 years. It has a site area of 8,880 square metres (sq m) and a maximum gross floor area (GFA) of 24,864 sqm.
Peggy Tan, Director, Capital Markets & Investment Services:
The land parcel in Tanah Merah Kechil Link is a very attractive site given its location and palatable size, making it more affordable and thus could attract a wider range of bidders. In addition, the inclusion of commercial component in the new development, whereby a minimum of 1,000 sqm has to be used for a supermarket, will be greatly welcomed by residents in the area as there is a lack of retail amenities in the vicinity.
Developers will still be on a lookout for good sites, albeit cautious when it comes to land acquisitions, especially with the bleak economic outlook. The URA has helped by allowing a longer tender period in view of the current COVID-19 environment. Developers will thus have more time to evaluate and put in their best bid.
Given its location being so close to the Tanah Merah MRT Station and affordable quantum, we believe the site will attract good interest from developers at the close of tender. We are excited to see the outcome of the tender.
Tricia Song, Director & Head of Research:
Despite heightened recession risks, we expect 7 to 9 developers to still be bidding, albeit at cautious bid prices. We forecast a top bid of S$225 million or S$845 per square foot per plot ratio (psf ppr).
To support firms, save jobs, and create opportunities for workers, a S$33 billion supplementary Budget was presented by Deputy Prime Minister and Finance Minister Heng Swee Keat in Parliament on 26 May, drawing a further S$31 billion from past reserves for the fourth Budget this year.
The Fortitude Budget includes extensions and enhancements of existing measures, and a scheme to create close to 100,000 jobs and training places.
While providing immediate support for Singapore's phased reopening, it also prepares firms and workers for the longer-term "new normal" in the COVID-19 crisis, said analysts.
Tricia Song, Director & Head of Research:
A new law will also be introduced requiring landlords to grant rental waivers to small and medium-sized enterprises (SME) tenants who have suffered a "significant revenue drop".
If passed, tenants in retail properties will get a total of four months of rental relief - shared equally between the government and landlords. Other SME tenants in industrial and office properties will also be given some relief. Read our analysis of the Fortitude Budget here.