Developers have shifted their focus to the private market, with Roxy-Pacific signing a $33.25 million deal for Harbour View Gardens. (Photo: Colliers International)
Edmund Tie & Co believes property developers are becoming more cautious with bidding in government land sales (GLS) exercises, resulting in the clustering of bids within a narrow band, reported Singapore Business Review.
With the sale of two land parcels within the GLS tender dominating Q3’s investment sales, the recent bidding for GLS sites indicates that property developers have remained prudent despite the need to replenish their land banks, said the property consulting firm.
“The case in point was the public tender for the land parcel at Fernvale Road, which edged the second highest bid by a mere 0.005 percent,” it explained.
Edmund Tie & Co also noted that developers have become more active in looking for land on the private market. OUE, for instance, acquired two land parcels at Nassim Road for $56.6 million, while Roxy-Pacific signed a conditional agreement to buy Harbour View Gardens for $33.25 million.
Excluding residential properties that cannot be subdivided into smaller plots, the total year-to-date investment sales amounted to S$9.6 billion. During the third quarter, investment sales volume stayed below the S$2 billion mark. Data compiled by Edmund Tie & Co showed that the lack of major transactions during the period saw investment sales drop from S$6.18 billion to S$1.76 billion.
Moving forward, the consultancy expects interest for Singapore properties to remain keen, even as most buyers are interested in distressed developments, or those properties with additional development potential.
In fact, some institutional investors are interested in Singapore for preservation of value and diversification of risk, it said. It believes that the investment sales volume seen in 2014 and 2015 is achievable, buoyed by government land sales.
Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories, email cheryl@propertyguru.com.sg
