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(SINGAPORE) Property consultants and analysts expect the government to stick to the reserve list as the mainstay of its land sales programme for private residential, commercial and hotel sites for the second half of this year.

"It's a market-driven approach where the govt only sells sites if there's demand.' - Knight Frank MD Tan Tiong Cheng

Under the reserve list system, sites are released only upon application by developers.

'They're likely to offer sites through the confirmed list only where they are needed for immediate development for some strategic purpose - as in the case of Marina Bay in the past,' says Colliers International associate director (research and consultancy) Tay Huey Ying.

'But at this point in time, the development of the area is progressing well with the award of the Business and Financial Centre (BFC) site and just last week, the Integrated Resort (IR) site. There doesn't seem to be a pressing need for development sites to be placed in the confirmed list for now,' she says.

Sites in the confirmed list are released for tender according to a pre-stated schedule regardless of demand from bidders. Under the reserve list, which was introduced in June 2001, the Ministry of National Development (MND) will launch a site for tender only if there is a successful application from a developer, accompanied by an undertaking to bid at a minimum price acceptable to the state.

The MND will end a 4 1/2-year hiatus on sales of confirmed list sites when it launches later this month the former Clifford Pier and next-door Customs Harbour Branch buildings. These are slated for adaptive use as a retail and lifestyle waterfront development and their inclusion in the confirmed list is to help complete the development of attractions around Marina Bay.

Looking ahead to the second-half government land sales programme, Knight Frank managing director Tan Tiong Cheng says: 'The reserve list has worked well. It's a market-driven approach where the government only sells sites if there's demand from bidders. So why force the market to behave in a certain fashion by having a confirmed list?'

Similarly, DTZ Debenham Tie Leung director Tang Wei Leng says: 'If at all the government offers anything on the confirmed list, it will be something that makes a meaningful difference to the Singapore landscape rather than something run of the mill.'

On the reserve list, however, property consultants had some suggestions on the type of sites that the government could offer.

For the residential sector, Mr Tan suggests the government should offer a broader spectrum of sites apart from the suburban sites for upgrader, mass-market housing where demand has been a bit sluggish. For a change, the government could offer some nice parcels in the prime districts and waterfront sites like in the Marina Bay location, given the strong demand for such homes.

Some market watchers note that rising land values for collective sales in the prime districts reflects strong demand from developers in this segment, so it could make sense for the government also to offer some 99-year sites in these locations. However, some property consultants, like CB Richard Ellis executive director (research and valuation) Li Hiaw Ho, takes a different view. 'There's enough supply from collective sales,' he says.

As for the commercial sites, Ms Tay of Colliers suggests the government could offer office plots within the reserve list in regional locations like Woodlands, Jurong and Paya Lebar to cater to demand for backroom offices. 'This will allow companies to decentralise their operations in the face of soaring office rents in the CBD,' she says.

While there will be tightening supply of prime offices in the CBD until BFC's first phase is completed around early 2010, it would not help for the MND to offer more office plots in this location for now. This is because any new projects can only be completed around the same time as the BFC, and bunch up supply in the area, Ms Tay says.

Most consultants also think there is scope for offering more hotel sites on the reserve list given the ambitious tourism targets. These could be in the Orchard and Marina locations, says Mr Li of CBRE.

He says: 'Even with the IR having 2,500 hotel rooms, there will still be a shortage. Once the IR is completed it will be a major attraction and the area could do with more hotels.'