Debated in Parliament on 5 Jul 2021.
Mr Chua Kheng Wee Louis asked the Minister for Law (a) what is the basis for determining the reserve prices for sites under the Government Land Sales (GLS) and Industrial Government Land Sales (IGLS) programmes; (b) for sites that have been put up for sale in the last five years, what is the number of sites that are not awarded as the highest bid is below the reserve price; and (c) what is the average percentage premium of the winning bid versus the reserve price for sites that are awarded.
The Reserve Price for sites sold under the Government Land Sales (GLS) and Industrial GLS programmes is pegged to 85% of the estimated market value of each site, as assessed by the Chief Valuer’s Office (CVO), taking into account proposed land use and site-specific conditions, relevant land sale transactions as well as rental and sale transactions of completed buildings. The Reserve Price serves as an internal guide to assess if tender bids are reflective of the fair market value of the land being put up for sale. Bids below the Reserve Price are not automatically ruled out; whether a site is awarded depends on the prevailing market conditions, number of independent bids received and the specific circumstances of each site.
Of the 133 sites launched for tender between 2016 and 2021, 17 were not awarded as the highest bids were deemed not reflective of the fair market value of the land. Of the sites that were awarded, the majority were within 15% of CVO’s estimated market value.
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