There may be opportunities for property developers to develop entire precincts in the future.
Many developers in Singapore have expressed their eagerness to participate in a private-public partnership model that will see them master planning new districts, reported the Straits Times.
In recommending the “master developer” model, the Committee on the Future Economy said the government should provide more flexibility in land use to enable developers to take a more integrated approach in developing districts.
Currently, the government conducts the master planning of precincts, before offering the land to property developers on a plot-by-plot basis.
“The opportunity for private developers to participate in master planning raises exciting possibilities for the real estate landscape,” said Christopher Tang, CEO of Frasers Centrepoint Singapore.
However, the tender award for such a model should not be based solely on the highest bid, but also on the developer’s master plan proposal, track record and financial commitment, noted Wen Khai Meng, CEO of CapitaLand Singapore.
In addition, given the longer development horizon and fluid nature of large precinct developments, option pricing may also be considered by the government to ensure business viability, he added.
Incentives such as lower development charge rates and additional gross floor area may also encourage the development of underground space, said industry players.
Christine Li, Research Director at Cushman & Wakefield, noted that while a significant portion of the master developer’s resources, including human capital and financial capital, is tied up to the project during its duration, the project’s success would “boost the master developer’s reputation and enable it to reap substantial profits”.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
