Property developers will likely adopt a bottom-up stock picking strategy in bidding for state land in the second half of 2010, according to DBS Vickers, one of the leading retail brokerages in Asia.
“We expect developers to be selective in their land bidding activities and bid prices going forward as they replenish their much-depleted landholdings and in view of the capped price upside,” it said.
It added that companies will prefer a more diversified business model, as well as a strong balance sheet capacity to acquire sites selectively.
According to a Channel News Asia report, property developers may only bid for the more profitable sites, like those at Bishan Street 14 and Alexandra Road, which several analysts have said are the most attractive.
One of the released sites under the 2H2011 Government Land Sales (GLS) programme was a land parcel at Alexandra Road. It is located near Redhill MRT station and analysts believe the site will likely be one of the most contested during a public tender.
“Because of the high price that these sites could attract, it may only appeal to some of the bigger developers, and even the mid-sized ones will join forces as a consortium to go in,” said Nicholas Mak, Executive Director of Research and Consultancy at SLP International.
“Some of the newer condominiums around (the) Redhill MRT station could be transacting at prices of S$1,300 to S$1,400 per square foot, especially for the smaller ones.”
Meanwhile, a Bishan Street 14 site will be released for sale by September, if the minimum price is met by bidders.
“We have good location, good amenities in there, good shopping areas, good schools in the neighbourhood and there will be a lot of interest by the end consumer,” said Dr. Chua Yang Liang, Head of Research (Southeast Asia) at Jones Lang LaSalle (JLL).
He said that CapitaLand will likely consider the site, as the company already acquired another Bishan Street 14 site in February for S$550.1 million.
“I believe since they have won the adjacent area, they may be looking at this as well to create a more continuous development,” he said.
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