Credit Suisse says bid spread shows developers wary
SHARP differences in bid prices offered by developers in the latest Urban Redevelopment Authority tender for a residential-commercial site at Yio Chu Kang suggest that the Government’s recent measures to cool the housing market are starting to take effect, said financial services firm Credit Suisse.
The tender closed on Thursday, drawing a total of 12 bids – one short of the 13 bids for two previous sites on the Reserve List of the Government Land Sales programme.
Credit Suisse notes that other than Far East Organization, which submitted the top bid of $119.08 million or $376 per sq ft per plot ratio (psf/ppr), other developers were more subdued, putting in bids at $154-278 psf/ppr.
Far East’s bid was 35 per cent above the second highest bid of $278 psf/ppr put in by Centurion RE.
“Hence, we believe the Government’s measures to cool the residential market announced on Monday did have an impact: Developers are more wary and selective, given there would be more supply,” Credit Suisse said in a research note.
Other bidders include Frasers Centrepoint, Ho Bee, Sim Lian Land and Soilbuild.
Although Credit Suisse believes that developers will continued to bank land for mass market residential sites as the end demand remains strong, “potential Government supply may cap prices” as sites on the Confirmed List will be released in the first half of next year.
Source : Today – 19 Sep 2009