Consider the idea of the rights to use, the lease idea, and its
capacity for rejuvenation. I think that's the idea we've had.
Maybe talk a little about that in the context of the city as a whole,
but also specifically in certain areas. Housing obviously, and in commercial, industrial.
Ownership of land and property, and the issue of leasehold is very emotional.
It's a very emotional topic particularly. I don't know, maybe it's very Asian right, it's very emotional.
But in the case of Singapore, we cannot compare to other countries and cities which have lots of land.
In the case of Singapore, in fact, I spent many decades worrying about
how do you continue to have a virtual cycle of land for future generations.
The issue of leases on land is really something that spends across generations.
So there are a few reasons for it. Lease whole land in Singapore, I mean the government had a lot of land.
whenever they sell it's always on leasehold. Why?
Because it enables a virtual recycling of land for future generations, that's the simple answer.
Nothing lasts forever, right. 30 60 90 years, you have to redevelop.
If everything is owned by a few people, where is the next generation going to get their housing,
and all the other facilities; where is business going to get the land.
It would be just much more difficult, and it's also for economic dynamism.
The leasehold mechanism and here, maybe Manohar can add a little bit more.
They are not necessarily all 99 years. Some are 30, some are 60.
In fact, in China it's 70 for housing. Some of the users, for example, commercial users, industrial users.
They're only on 30 years. Why? Because things change so much.
When they are shorter lease, firstly, the land is cheaper for the developer and the entrepreneurs
but at the same time, it allows the change to take place even as economic changes take place,
so that's why different leases. The other thing is to enable comprehensive rejuvenation.
When plans are done, we actually look at leases and we try to
ensure that leases, even if they're renewed, they were more or less
finished around the same time in a large area, aside from housing which is 99 years.
The reason is because it enables an opportunity to rejuvenate a larger area together when the leases complete.
And you can see a lot of this happening. Land in the north, you know, for industry,
or Sembawang shipyard when they end. Well, then you'll have the potential for rejuvenation.
So the leasehold concept is actually a very important concept, particularly in the case of Singapore.
But I would say even in large cities, because a city cannot just sprawl and sprawl forever,
if you have a lot of activity in a certain boundary, it needs to rejuvenate.
You need to recycle the brownfield sites, so maybe I'll just stop there.
Yeah, Manohar, there's actually one question already related specifically to industrial land leases and again,
it touches on the point about how quickly do we need to change this idea
to make this space quite dynamic, evolving with the times.
Yeah, we could do that deal with that?
Because of our constraints, of course, there's always a question of trade-offs.
We also have to bear in mind that businesses want predictability, so we have to balance between
being agile and being predictable. That's why I always remind all my...
when I was in the public sector, we must be very careful of any policy changes we make, that they do not have unintended consequences.
We talk about trust being our number one selling point in Singapore, so all these things, when we change policies,
it touches on trust a little bit. It is not intended definitely, but it touches on it.
That's why we just need to be very careful when we make changes in policies.
So I come to this tricky question of industrial land. I explain why industrial land is important for us
and in the early days of our industrialization in the 60s, we used to give companies
that qualified for direct allocation 60-year leases, and it was the right thing to do because
you need to run your cash flows, you need to have predictability and all that.
But just take into consideration this. When I was a young man and that's not very long ago.
In the 80s, our GDP per capita was less than 10,000 US dollars.
Today, one generation later it's 60,000. So we have grown six-fold.
So obviously, the industries that we were attracting at that time, a large majority of them are no longer suitable
because our job is not only to create jobs. It's to create good jobs and improve the quality of the life of our people
So we were labour-intensive, then we moved to skill-intensive, then capital-intensive and then
now we are more knowledge and innovation-intensive.
We have to find new expressions.
And when you look at all the land occupied by people who came in the 60s,
and the leases are still there, and the land not being put to good use.
So therefore, the discussion started, that for direct allocated land, should we reduce it to 30?
Because the pace at which the economy is changing is tremendous, so it was a difficult decision.
But I think it was the right decision, so today, as a general case,
when industrial land is allocated, it is for 30 years.
That's where I think when you explain to people, they understand, of course, nobody is happy.
If you were the person taking the land, you would rather want it for 60 than 30, right?
So I think you really have to articulate this and these are the difficult trade-offs that you need to make
in a land-scarce country like Singapore. Having said that, Koon Hean is absolutely right.
Other cities have also done that, either because they saw what we have done or they, in fact, do it one better.
In certain cities in China, it's even 20 years for industrial land.
So I think that's why we need to make trade-offs but at the same time, we also need to be careful that
just because 30 years work for one segment, it does not mean it should be the case for other segments.
So I think if it's a more generic building, if it's not a specialized building that's directly allocated,
it's a business park building where tenants can change, and the building
doesn't need to change too much, we must have different considerations.
So I think that is the balance that we need to make but I do want to highlight the point that
every time we make a policy change, we must be cautious of the fact that
from the business people's perspective, actually, predictability is very important.
And when we do make such major changes, we must be able to articulate this clearly to the industry on why we are doing this.