Depleting landbanks and strong private home sales at recent launches have encouraged developers to bid aggressively for recent GLS sites.
According to Cushman & Wakefield’s latest report, the aggressive bidding at public land tenders this year saw developers paying 29% more on average for residential plots over comparable sites sold in the past five years. This was a sharp increase from an average premium of 13% in 2H2016.
Cushman & Wakefield says interest from foreign developers has also intensified, with 50% of land tenders awarded to foreign bidders in 1H2017. They include S P Setia, a Malaysian developer that won the bid for Toh Tuck Road, and China Construction Development, for West Coast Vale. The number of bidders has also increased from an average of 8.3 per land tender in 2H2015 to 13.3 per land tender in 1H2017.
Developers’ hunger for attractive residential development sites is set to continue this year, fuelled by positive sentiment in private-new-home sales and the upcoming development sites with premium locations such as the first landmark project for the new Bidadari housing estate.
Optimism among local and foreign developers will lead to higher land prices as evidenced by the premium that developers paid in anticipation of selling the properties at a higher price several months down the road, says Cushman & Wakefield.