With demand for housing looking robust, property developers are now on the hunt for the best land sites money can buy.
But small and medium-sized developers said they feel sidelined when it comes to bidding for government land plots.
They said the larger property players have a much higher chance of winning the most attractive land parcels, because of their stronger bids.
Medium-sized property developer Heeton Holdings is on a land acquisition spree.
It has formed a consortium, called Residenza, with Kim Seng Heng Holdings and TEE International to buy land sites.
Heeton said teaming up with other property players makes it easier for them to bid for quality plots.
Danny Ong, chief operating officer of Heeton Holdings, said: “With this, we have synergy of exploiting each other’s expertise and resources. And furthermore, we are three public-listed companies that have credentials in being able to…(borrow) from banks easily and with good and preferential rates.”
But with their financial muscle, big property players are currently dominating government tenders.
For instance, a Bishan Street 14 land site, which is a short walk away from Bishan MRT Station, attracted a record 19 bids last month.
CapitaLand submitted a S$550 million bid.
Coming in second was Keppel Land Realty, with a bid of S$432.3 million.
But the minimum bid required for the tender was only S$189.8 million.
While the smaller developers lag behind, analysts said competition for public land is about to further heat up.
Colin Tan, head of research and consultancy at Chesterton Suntec International, said: “With the cooling measures and all that, I think developers are getting a bit anxious. Developers are turning around their projects in as short as five months, which means that competition for sites will intensify, because these developers, having turned their projects, will now re-enter the market.”
Because of the stiff competition for public land, Heeton said most of its projects are redeveloped from smaller private land sales.
Residenza bought two enbloc sites last week. They are Macpherson Green, which was bought with Zap Piling for S$105 million, and Camay Court in Telok Kurau, which was bought for S$30.5 million.
To diversify away from land-scarce Singapore, Heeton said it will venture further into China and Malaysia.
Source : Channel NewsAsia – 16 Mar 2011