Developers' demand for land has not waned but are becoming picky
Small developers seemingly more active in the tenders.
In maintaining a similar residential pipeline as in 1H12, MayBank surmises that the government believes developers’ demand for land has not waned, and hopes to provide ample supply to prevent runaway land costs and indirectly keeping property prices down.
Under the 2H12 GLS Programme, there will be 12 residential sites on the Confirmed List (comprising six EC sites) potentially yielding 7,100 units. On the Reserve List, there are 14 residential sites (no EC sites) which could
yield another 7,100 units.
MayBank however cautioned that while developers'demand has not waned, they are becoming picky.
"While the GLS offers developers a “buffet spread”, developers have also been very selective, with the smaller developers seemingly more active in the tenders. Based on the tenders closed thus far this year, the most recent three have only attracted five bids each, even though pricing still appears fairly optimistic. Looking ahead, we expect fiercer competition only for the more centrally located such as the 1.2ha site at Commonwealth Avenue, or the 1.1ha site at Bishan, next to CapitaLand’s Sky Habitat. However, the suburban sites could continue to draw bids from the smaller developers.," said MayBank analyst Wilson Liew.