Master developer? Not a big leap for Singapore players

A "master developer" model for new districts would be a boon for the real estate sector here, analysts said.

Large players with overseas experience in project development would be well suited to taking part.

Recommending such a private-public partnership model, the Committee on the Future Economy has said that greater flexibility in land use should also be allowed.

This could see developers taking charge of much larger sites and having a freer hand in land zoning, which would allow them to take a big-picture, more integrated approach to developing districts.

Consultancy Chesterton Singapore managing director Donald Han said: "In selecting the master developer, I think the Government will consider if the party has a long-term vision, financial credibility, ability to perform and experience in integrated development."

Currently, masterplanning of precincts is done by the Government, which then offers land to developers on a plot-by-plot basis.

The master-developer model will likely involve a substantially larger site for tender, which industry players said could offer economies of scale, given the bulk procurement of supplies and services.

It could also drive productivity gains.

Should the Government roll out this partnership model, many developers may be eager to play a part.

Frasers Centrepoint Singapore chief executive Christopher Tang told The Straits Times: "The opportunity for private developers to participate in masterplanning raises exciting possibilities for the real estate landscape."

He added that the company has seen successful models overseas and believes "synergy and collaboration" will be the keys to success.

Conglomerate Keppel Corp and developer CapitaLand have also expressed interest in exploring such opportunities.

Responding to a Straits Times query, Keppel cited its role as master developer in projects such as the China-Singapore Suzhou Industrial Park and the Sino-Singapore Tianjin Eco-City, as well as Palm City, a 30ha township in Vietnam.

It said Keppel companies can offer "a comprehensive suite of products and solutions for the development of townships", such as the provision of heating and cooling as well as logistics services in the Tianjin Eco-City.

CapitaLand said the pricing of land will require plenty of support from the Government in the master-developer partnership.

"Given the longer development horizon and fluid nature of large precinct developments, option pricing may be considered to ensure business viability," said Mr Wen Khai Meng , chief executive of CapitaLand Singapore.

CapitaLand has a wealth of experience in integrated development projects here and abroad.

It is developing 21 plots of land - about 0.42 sq km - in Guangzhou's Datansha Island Urban Redevelopment project.

Mr Wen added that the tender award should not be based solely on the highest price but should also take into account the developer's track record, masterplan proposal and financial commitment.

Industry players said incentives such as additional gross floor area and lower development charge rates could encourage the development of underground space.

Cushman & Wakefield research director Christine Li said one downside for the master developer is that "a significant portion of its resources, including financial capital and human capital (such as urban planners), would be tied up for the project duration".

However, the success of such projects would "boost the master developer's reputation and enable it to reap substantial profits".

This article was first published on February 20, 2017.
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