Singapore developers shun housing site for first time in 20 years as demand falters

The lack of bids is a setback for efforts tackling high rents as the government pushes out a new kind of long-term serviced apartment. The Upper Thomson Road site was one of two earmarked for construction of some apartments requiring a minimum three-month stay, up from the current seven-day requirement.

The pilot was part of efforts by authorities to tackle a major surge in residential rents, which remain near multi-year highs, despite an easing in recent quarters. Developers have turned cautious as new home sales fell for a second month in May.

Tepid foreigner demand and economic uncertainty are making developers think twice, according to CBRE Group Inc., which added that this was the first time such a site saw no bids in more than 20 years.

The other pilot site for long-term serviced apartments on the fringe of the city centre drew only one bid, which was accepted in April. Shares of Singapore-based developers were mixed in morning trading. City Developments Ltd, which backed the bid, were largely unchanged, as was UOL Group Ltd. Frasers Property Ltd’s shares fell as much as 1.3 per cent.

“Market sentiment is weak, and caution rules the day” for developers, said Nicholas Mak, the chief research officer at Mogul.sg, a property portal.