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Property News12 Jan 2018

Public works, en bloc projects to fuel 2018 building demand

THE BUILDING and Construction Authority (BCA) projected that S$26 billion to S$31 billion in construction contracts could be awarded in 2018, up from the S$24.5 billion estimated to have been awarded in 2017.

Singapore City

The projected higher construction demand is due to an anticipated increase in public sector work, which is expected to grow from S$15.5 billion in 2017 to between S$16 billion and S$19 billion this year.

Public works contribute to about three-fifths of 2018's total projected demand. The remainder, coming from the private sector, is also expected to be an improvement - from S$9 billion in 2017 to between S$10 billion and S$12 billion in 2018. The growth will come on the back of a stronger economic outlook and upturn in property market sentiment, BCA said.

BCA also explained that last year's total construction demand was slightly lower than the original S$28 billion to S$35 billion estimated because a few major public-sector infrastructure projects - such as the North-South Corridor expressway - were rescheduled to 2018 amid longer preparation times required for complex, large-scale projects.

Some of the projects expected to be awarded this year include the North-South Corridor, new MRT works and Deep Tunnel Sewerage System Phase 2, as well as the remaining package for Runway 3 by Changi Airport Group, more healthcare facilities such as the redevelopment of National Skin Centre in Mandalay Road and Woodlands Integrated Health Campus, as well as a pipeline of new public housing construction and condominium projects in Shunfu Road, Stirling Road, Hougang Avenue 7 and Upper Serangoon Road.

In his opening address at the BCA-Redas Built Environment and Property Prospects Seminar 2018, Desmond Lee, Second Minister for National Development, noted that Singapore's overall GDP growth is expected to come in at 3.5 per cent for 2017, which is at the high end of initial forecasts. At the same time, sentiment in the private property market seems to be improving.

"BCA projects that construction demand for private residential projects could be up to S$3.6 billion this year. Some of this will be generated by the spate of en-bloc sales which will also lead to increased supply of new private housing units over the next few years."

He added that even in the private commercial property space, demand for such projects could hit S$2.5 billion this year, backed by upcoming office development projects at Central Boulevard and Harbour Drive.

The agency anticipates that in the medium term, construction demand will reach S$26 billion to S$33 billion per year for 2019 and 2020, and S$28 billion to S$35 billion per year for 2021 and 2022.

As has been the case in previous years, the public sector is likely to lead demand and contribute S$16 billion to S$20 billion per year from 2019 to 2022, with a somewhat equal split between building projects and civil engineering works, it added.
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