The land sales market was relatively subdued in the past 6 months due to the high interest rate, changes to gross floor area computation and cautious outlook among developers, funds and investors.
In terms of GLS, the Government sold 4 sites at Lentor Gardens, Jalan Tembusu, Marina Gardens Lane and Tampines Ave 11. There was 1 enbloc at Kheam Hock Road.
The Land Betterment Charges (LBC) for Group B2 (non-landed) for Sept 2023 to Feb 2024 have eased slightly by around 3% on average due to the subdued land bids. LBC for Sector 107 where the GLS site at Lentor Gardens was located eased by 6.3% while LBC at Sector 92 where the Jalan Tembusu GLS site was at eased by 4.5%.
The LBC for Group A (Commercial) for Sept 2023 to Feb 2024 edged up by 0.4% on average probably due to the robust interest in shophouses and strata office space.
Solitaire on Cecil, a brand new freehold office development was sold out in less than 3 months of launch with prices exceeding $4,300 psf.
A row of shophouses along Circular Road in Sector 21 was sold for $80 million in June 2023. In the same sector, 2 shophouses along Boat Quay were sold for $37 million and $30 million in Mar and May, respectively.
According to the latest survey, developers are negative on the prime residential segment while staying slightly positive on suburban residential segment. Land bids for suburban sites under the GLS programme are forecasted to stay stable while the collective sales market is not likely to pick up in the next six months.
The recent money laundering investigation may result in the shophouse market staying quiet for some time.
Hence there is a possibility that LBC rates may trend down in the next revision. This will help to ease cost pressures on developers and may give the residential market a slight boost in 2024.