Foreign presence in the Government Land Sales (GLS) programme has been loud this year, with 4 out of the 8 current successful bids coming from foreign developers or entities with strong foreign involvement. And the prices they have been willing to fork out have been eye-catchingly high. Are land bids being driven up and how will they affect property prices in the next few years?
A Stirling Road residential site has surpassed the $1 billion-dollar mark this year with the winning bid coming from Chinese developer Nanshan Group. The bids have been coming fast and furious, and most of the top few bids per site have been well above the median bid. Take the landed housing site in Lorong 1, Realty Park in Hougang for example, the winning bid from a Chinese developer Fantasia Holdings, was 40% higher than the median bid and in a site in Toh Tuck Road, Malaysian developer SP Setia won the bid at 30.4% above the median.
Property analysts are attributing recent aggressive bidding to foreign developers’ strategic needs. Chinese developers for example are keen to direct excess manpower and materials to projects here, expanding their portfolios and al the while maximising the potential of redirecting investment monies from clients. While these land bids may seem excessive to us, the quantum price is likely much lower than that in the other territories in which these developers invest. Overly optimistic or just optimistic? Whichever the case, their optimism may rub off on the market here and for the better, at least for now.