2nd commercial site released in Woodlands ‘faces office-space glut’

SINGAPORE — The Urban Redevelopment Authority (URA) has released a commercial site in Woodlands Regional Centre from the Reserve List of the first half 2015 Government Land Sales (GLS) programme, but analysts said the land parcel is not likely to be triggered for sale in the near future given the large impending supply of office property.

The 99-year leasehold site at Woodlands Square sits on 240,948sqf and has a maximum permissible gross floor area (GFA) of 843,319sqf, the URA said yesterday. The proposed development must have at least 506,000sqf, or 60 per cent of the maximum GFA, earmarked for office use. Up to 86,111sqf of GFA can be set aside for retail as well as food and beverage uses, while a minimum 10,764sqf has to be used for childcare centres.

The URA said the release of the site —the second commercial plot in Woodlands Regional Centre — will help Woodlands develop into a key commercial cluster. The first commercial plot there was sold for S$634 million to a consortium led by Far East Organization in April last year.

But analysts said developers may not be keen on the second site due to the large supply of office space hitting the local market in the next several years. Mr Nicholas Mak, executive director of research and consultancy at SLP International, noted 5.5 million sqf of office property will be completed next year and another 1.65 million sqf will be added every year from 2017 to 2019.

“Furthermore, the Total Debt Servicing Ratio framework has also dampened the demand from retail investors for strata-titled commercial space,” he said. Lee Yen Nee