Share Printer-friendly version

News Releases

8 March 2010

Enhancing the responsiveness of the reserve list system

The Minister for National Development announced today the following improvements to the Reserve List system:

 

  1. Reducing the deposit to be provided by successful applicants of Reserve List sites from 5 percent to 3 percent of the minimum price committed, with the deposit capped at S$5 million;
  2. Releasing sites on the Reserve List for sale when there is sufficient market interest received for the sites; and
  3. Making available a larger supply and wider variety of sites in the Reserve List for the second half 2010 (2H2010) Government Land Sales (GLS) Programme.

The Reserve list system

The Reserve List system was introduced in 2001. It makes available additional sites, in addition to those on the Confirmed List, so that there is more than sufficient supply to meet any surge in demand.

Under this system, a developer who is interested in a site on the Reserve List would submit an application to the Government for the sale of the site, stating the minimum price to be committed for the land parcel. If the minimum price meets or exceeds the Government’s Reserve Price1, the application would be accepted. The applicant is then invited to execute an agreement to bid for the site at a price not less than the minimum price and to pay a deposit equivalent to 5 percent of the minimum price. Following this, the site will be launched for sale by public tender.

The Reserve List system has worked well. A total of 65 sites have been successfully triggered and sold under this system. In 2009 alone, 11 sites for residential, hotel and industrial developments were successfully triggered and sold.

To ensure that the Reserve List system remains responsive to dynamic market conditions and business needs, the Economic Strategies Committee (ESC) has earlier recommended that the Government review and make improvements to the system to make it less onerous for developers to trigger sites on the Reserve List. This will enable supply to be more easily activated when needed. In response, the Government has conducted a review of the Reserve List and has decided to implement a number of improvements. Details are given below.

Reducing the deposit for
successful applicants of reserve list sites

With immediate effect2, the Government will reduce the deposit to be provided by successful applicants of Reserve List sites from 5 percent to 3 percent of the minimum price, capped at S$5 million. The reduced deposit will help lower upfront cost and the cash flow burden of the successful applicants when they trigger sites on the Reserve List.

Releasing reserve list sites for sale
when there is sufficient market interest

The Government will consider launching a Reserve List site for sale once it has received sufficient market interest for the site. A site is deemed to have received sufficient market interest if more than one unrelated party submit minimum prices that are close to the Government’s Reserve Price for the site within a reasonable period. The details of the process for such triggering of Reserve List sites are shown in Annex A.

With this improvement, a site on the Reserve List can be released for sale by public tender even if the application prices are below the Government’s Reserve Price. This will also enhance the responsiveness of the Reserve List system to dynamic market conditions. This new process will also take effect immediately.

Increasing the number and variety of sites
available on the reserve list

Under the Reserve List system, developers can initiate more sites for sale and development, beyond what is provided for in the Confirmed List, based on their assessment of the property market conditions and outlook. To give developers more choices and allow them to better respond to varied market demand, the Government will make available a larger supply and wider variety of sites in the Reserve List in the 2H2010 GLS Programme. The Government will announce details of the 2H2010 GLS Programme by June 2010.

Issued by the Ministry of National Development

---------------

  1. The Government’s Reserve Price is set at 85% of the Chief Valuer’s (CV) Estimated Market Value (EMV) for the site.
  2. This would apply immediately to all Reserve List site applications which have been received by the various government land sales agencies, namely, URA, HDB and JTC, including those applications which have been accepted by the agencies but for which the successful applicant has not yet signed the agreement for tender and paid the deposit.