Property experts in Singapore predict aggressive competition among property developers for quality land sites in the country this year.
Plots situated near regional centres or public transport hubs are currently the most in demand. From the current government land tenders, these areas have received bids of up to S$550 million (US$435 million), or S$869 (US$687) psf ppr.
Experts believe that rivalry among property developers for quality sites will intensify, as developers tend to open their new projects to the market at a quicker pace.
In the first half of 2011, 10 land plots near regional centres or MRT stations were made available in the government land sales (GLS) programme. Five sites have been released for sale, of which three have already been awarded to prominent developers.
United Venture Development won the tender for a Bedok Reservoir site for S$320 million (US$253 million) and Keppel Land acquired a Sengkang site for S$287 million (US$227 million), while Capitaland offered the highest bid of S$550 million (US$435 million) for a reserve-list Bishan site.
“For the past two years, most of the developers have been highly profitable,” said Colin Tan, Head of Research & Consultancy, Chesterton Suntec International.
“This is a dilemma now. They have lots of cash and what do they do with it? That’s why you see quite a good participation rate for most of the state land sales.”
Experts believe that the outstanding land parcels will attract great interest from numerous developers and that competition for quality land sites will remain steady.
However, they also emphasised that competition will be limited to large firms, as the prices for quality land sites are too high for smaller developers.