Singapore Property

Kim Eng on 1 Feb 2013

Government releases Land Use Plan. Following the release of the Population White Paper projecting a population of 6.9m people by the year 2030, the government has released its Land Use Plan titled “A High Quality Living Environment for All Singaporeans”, describing how the additional 1.6m people will be accommodated.

Land mass to increase by 8%. Essentially, to house the bigger population, Singapore aims to increase its land supply from the current 710 sq km to 766 sq km. In addition to more land reclamation, the government will develop some reserve land, intensify new developments and recycle land which is currently on lower intensity uses, such as old industrial areas and golf courses.

Introducing three new towns. In the near term, three new towns will be opened at Bidadari (12k new homes over the next 2-3 years), Tampines North (21k new homes over the next 2-3 years) and Tengah (55k new homes over the next 3-5 years). In addition, Punggol will be further developed to house 96k homes, tripling its current size.

More options in the Central Region. To allow more Singaporeans to live close to where they work, more homes will be made available in the Central Region, where new estates are being planned at the former Bukit Turf Club, Kallang Riverside, Keppel and Bukit Brown areas.

Bringing jobs closer to homes. More decentralized commercial nodes will be developed to supplement Jurong Lake District, One-North and Paya Lebar Central. The “live, work and play” concept will be extended to create a North Coast Innovation Corridor, stretching from Woodlands Regional Centre, Sembawang, the future Seletar Regional

Centre to Punggol. In the longer term, a new Southern Waterfront City will extend from Marina Bay through Telok Blangah to Pasir Panjang terminal. Effectively, once PSA relocates its port operations out of the existing City and Pasir Panjang Terminals from 2027, 9m sqm of prime waterfront land will be freed up. To maintain Singapore’s status as a global financial hub, Marina Bay offers at least another 1m sqm of prime office space, compared to the current 6m sqm.

Sufficient land resources even beyond 2030. Even as Singapore’s population reaches 6.9m in 2030, the government envisions that Singapore would not yet burst at its seams. More land could potentially be reclaimed at Marina East, Simpang, Changi East, Sungei Kadut and around the Western Islands.

Stock picks. As with the Population White Paper, the concepts spelled out by the Land Use Plan are unlikely to impact any one stock immediately. However, we reiterate that CapitaLand (CAPL SP, BUY, TP:SGD4.27), CMA (CMA SP, BUY, TP:SGD2.55) and CMT (CT SP, BUY, TP:SGD2.36) could benefit in the medium to long term with their strong presence in Jurong Lake District, which will see its hinterland
grow with the eventual fruition of Tengah New Town. In addition, the various growth regions will yield more opportunities for CMA and CMT to expand their retail mall operations.