In the year ended March 2009, the Singapore government collected around $7.3 billion profit from state land sales, $5.1 billion less than the $12.4 billion recorded in 2008.
The figures had been released yesterday in the latest annual report of the Singapore Land Authority.
For the recent financial year, analysts hope to see higher sales proceeds compared to the previous year as the property market’s activity resumes. However, the sales proceeds are not expected to reach the record $12.4 billion gathered during the property boom in the fiscal year 2007 and 2008.
Citing the recent growth in the demand for government land, Tay Huey Ying, director of Colliers International, said, “There is a good chance that we can surpass the numbers seen during the last financial year.”
According to Colin Tan, research and consultancy director of Chesterton Suntec International, with developers now desperate to seek for lands and with the improved sentiment, revenue for land sales must continue to increase this year as more sites have been sold at higher prices.
The plummet in last year’s total revenue of sales was the result of lower proceeds from the sites that private sectors had purchased. This fell from $10.4 billion in fiscal year 2007 to $4.7 billion in fiscal year 2008 and 2009. Those lands that had been sold to public sectors slightly rose from $2 billion in FY 2007/2008 to $2.6 billion.
The sale of Grade A office building, the Atrium@Orchard, to CapitaMall Trust is the biggest deal of the year, giving the state a net earning of $840 million.
Other big sales of government sites to private sectors include the parcels of land for condominium projects Mi Casa situated at Choa Chu Kang and The Peak and Trevista at Toa Payoh.
“The slowdown in business was particularly felt in the second half of the financial year”, said the chief executive and chairman of SLA in their joint message.
Consequently, as the demand for properties and state land were quite strong in the first half of the fiscal year, the focus of SLA in the forthcoming six months was to implement the economic relief measures of the government for business and facilitate the need for lands for the development of infrastructure.
The operating income of the agency drop 8 percent from $100.9 million in 2008 to $92.5 million.
According to SLA, the state land’s utilisation rate increased to 79 percent, from the 77.8 percent of the pervious year. However, state properties’ occupancy rate was 86 percent, one percentage point low from last year. As of 31 March 2009, SLA managed an estimated 4.03 million sq m total gross floor area of state properties.
It was also reported by the agency that caveats and fewer instruments were lodged for private property and HDB transactions. In fiscal year 2008/2009, there were only 342,624 recorded registrations, down from 537,629 a year before.
Looking ahead, analysts expect a strong residential land sites demand.