Commentary: Can the land that country clubs occupy be put to better use in Singapore?
With land supply being highly inelastic in Singapore, authorities will likely rezone country club sites, like Raffles Town Club in Bukit Timah, to benefit the wider community, says NUS Business School's Sing Tien Foo.
SINGAPORE: News that Raffles Town Club's lease will expire in 2026 raises questions about the future of country clubs in Singapore. Many have leases expiring sometime between 2030 and 2040, including Orchid Country Club, whose lease will not be renewed after it expires in 2030.
Country club membership is one of the "5Cs" that upwardly mobile Singaporeans desired in the 70s and 80s. The other 4Cs stand for cash, car, credit card and condominium.
However, the aspirations of young Singaporeans have evolved over the years. Material possessions, along with expensive and exclusive country club memberships, are no longer the only indicators of success and social status.
With country clubs no longer appealing to the new generation of Singaporeans, can the land that they occupy be put to better use?
It is not unusual for authorities to let leases lapse and to rezone land to benefit the wider community. In 2020, the land occupied by 191 private terrace houses at Lorong 3 Geylang was returned to the state when the lease expired. The land was slated for new public housing development.
The Raffles Town Club site will also make way for future residential development.
TRADE-OFFS IN LAND USE ARE INEVITABLE
Land supply is highly inelastic in Singapore. There is a limit to how much more land can be reclaimed; thus, optimising land use and making trade-offs is inevitable and necessary.
When the Ministry of Law announced the lease expiry dates of several golf clubs in 2014, it said that although many Singaporeans enjoy golfing, the activity is land-intensive. It argued that the number of golfing sites would have to be reduced over time to make way for housing and public infrastructure.
Currently, golf courses take up about 2 per cent of Singapore's total land area. That is a significant proportion of the 7 per cent of the land set aside for community, institution and recreation facilities, as per Singapore's 2030 planned land use.
Not all golf clubs with expiring leases have been able to find new homes. While Keppel Club relocated to Sime Road after its lease at Bukit Chermin expired in 2021, Marina Bay Golf Course faces a different outcome and will be closed when its lease expires in June 2024.
Moreover, the Singapore government can compulsorily acquire land before the lease expires. Raffles Country Club and Jurong Country Club were acquired in 2018 and 2016, respectively, as part of the now-halted high-speed rail project.
With the discontinuation of the project, the Raffles Country Club site will house a MRT train testing facility, and the Jurong Country Club site will be used for mixed-use, commercial and residential developments.
REZONING LAND FOR FUTURE HOUSING NEEDS
From a developer's point of view, housing may be the most optimal use for the Raffles Town Club site. Its prime location and accessibility to amenities imply that the potential land value outweighs the value of its existing social club use.
Raffles Town Club sits in an exclusive residential enclave and is within walking distance to Stevens MRT station. Two popular primary schools, Singapore Chinese Girls' School and Anglo Chinese School at Barker Road, are within the 1km boundary. The Botanic Gardens and the Orchard Road shopping belt are easily accessible from the site.
Assuming a unit price of S$2,700 per square foot and a construction cost of S$400 per square foot for condominium development, we estimate a value of S$270 million for the subject site on a 99-year lease. Compared to the land value of S$100 million paid in 1996, the land value grew by 3.34 per cent annually on a compounding basis over 30 years.
A REPLACEMENT SITE FOR RAFFLES TOWN CLUB?
Will country clubs soon be antiquated in an ever-growing and evolving Singapore?
Though the number of country clubs may diminish over the years, social clubs still exist. Some have long histories; for example, Singapore Recreation Club, Singapore Cricket Club and Tanglin Club were all founded in the 1800s. These older social clubs admit only a small group of members of high social standing.
Community-based clubs and clubs for special interest groups, such as SAFRA and HomeTeam NS clubs, offer recreational facilities, leisure and social activities, and dining options for members and their families.
For Raffles Town Club to find a replacement site, it will need to ensure the availability of financing sources, either from its reserves or top-up fees by members.
The capital outlays in buying a new site and constructing new facilities could be substantial. Keppel Club paid an estimated S$31 million for its new premises at Sime Road, previously operated by Singapore Island Country Club (SICC). With the club’s estimated reserves of S$25 million, Keppel Club members were expected to pay a fee of S$5,350 for the relocation exercise.
If new funding from the members' contributions and other external financing are unavailable, the club named after Sir Stamford Raffles would risk entering Singapore's history books.
Sing Tien Foo is the Provost's Chair Professor at the Department of Real Estate, NUS Business School, National University of Singapore. Views are those of the author and do not represent those of NUS and its affiliates.