Smaller developers feel victimised. Who cares?

[ecimbew]

Taken from CNA


SINGAPORE : 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.

- CNA/ms

[ecimbew]

Who cares about developers not having enough land because richer developers have money to outbid them?

[august]

these small guys are also the ones who do MM units ...

[devilplate]

these small guys are also the ones who do MM units ...

but lots of small sites r enbloced in 2010....tons of MM coming....:doh:

[Wild Falcon]

In the first place, every Tom Dick and Harry suddenly jump into the bandwagon and become property developers becos of easy money to be made. These Tom Dick and Harry decided to put aside their core businesses (e.g. budget hotels, sell biscuits, sell books like Popular etc) and become developer for easy money. Now that money is no longer that easy, they complain for what? They just do what they do best instead of building inferior buildings. These guys build the worst homes and only know how to build MM.

[HP65]

In the first place, every Tom Dick and Harry suddenly jump into the bandwagon and become property developers becos of easy money to be made. These Tom Dick and Harry decided to put aside their core businesses (e.g. budget hotels, sell biscuits, sell books like Popular etc) and become developer for easy money. Now that money is no longer that easy, they complain for what? They just do what they do best instead of building inferior buildings. These guys build the worst homes and only know how to build MM.

Exactly. I have always maintained its not productive for any economy to be so obsessed with ppty and ppty speculation makes it seems easy money. This is akin to the discovery of black gold in some african countries and their inability to handle these easy riches.

For some developers, its normal to have ppty since their initial core business (bookshops, wet markets) needs space. Instead of being tenants, owing their own shops or market space help these businesses manage their business costs. Otherwise, they are subjected to uncertain rental costs.

However, with the potential of easy money from ppty development, the initial core business seems unattractive with low returns. The incentives to innovate their core business takes a back seat and eventually gives way totally to ppty development.

I feel these small time developers, if they do fail, has only themselves to blame. I agree with ecimbew, `who cares?'

[land118]

Launched 2-3projects in 1year much easier than selling books and pens...,Popular launched it's 3 property project at 8 Raja late last year...

[Geylang OKT]

I already said many many times over and over and over again never to ever buy a MM unit :doh: :tongue3: ;)

[kane]

When push comes to shove, 2 bedders and 3 bedders owners offer the same rental as the 1 bedders, guess who's gonna get the tenant.

[devilplate]

When push comes to shove, 2 bedders and 3 bedders owners offer the same rental as the 1 bedders, guess who's gonna get the tenant.

????

of coz all rental of various sizes drop together.....end of the chain rental supply is room rental....

if condo 2 bedder drop to hdb 3rm price...who gona get the tenant? haha

[devilplate]

I already said many many times over and over and over again never to ever buy a MM unit :doh: :tongue3: ;)

our mm king oredi flipped few times....cash in the pocket liao....wat can u say?:p

[kane]

????

of coz all rental of various sizes drop together.....end of the chain rental supply is room rental....

if condo 2 bedder drop to hdb 3rm price...who gona get the tenant? haha

I personally don't think those new mm launches offer a large buffer margin for error. narrowing of rental spreads between big and small units is not in the favour for MM units.

[kane]

our mm king oredi flipped few times....cash in the pocket liao....wat can u say?:p

good for those who bought early. hopefully the music doesn't stop for the late entrants.

[ysyap]

good for those who bought early. hopefully the music doesn't stop for the late entrants.

It is precisely because the govt introduced so many property cooling measures that mm units become very attractive to small time investors (investors w/o endless cash flow). Consider 40% of a 500K mm unit = 200k vs 40% of a $1m 2/3 bedders = 400k. Furthermore, comparing between them, a 500K mm unit is more readily available as compared to a 1mil 2/3 bedders (almost extinct in most popular districts). As such, less $ and more availability in market definitely appeals to investors. Sigh! Go and sleep lah. :sleep:

[hyenergix]

There is a possibility that large developers could form oligopoly in the property market. After getting control of market segment or location, they could have adverse impacts on the property sellers or buyers.

[ysyap]

There is a possibility that large developers could form oligopoly in the property market. After getting control of market segment or location, they could have adverse impacts on the property sellers or buyers.

In my opinion, this is highly unlikely. First, govt is closely monitoring the situation to prevent any control of the property market by big developers. It'll be highly unhealthy to the market. Second, govt launching so many parcel of land that with the few big developers, they probably have to buy 2 or 3 lands each per year in order to control among themselves. Too much diversity for them in a year. They may not go for it. Third, in order to muscle around, these big developers will then have to bid convincingly above the smaller developers meaning they might not profit much and this again is not gonna work for them. Just my opinion....:tsk-tsk:

[teddybear]

How about everybody aspired to be private bankers and work investment banking, invest here invest there and try to come out with misleading products to confuse people (e.g. structured deposits) that has no social and economic benefits to the economy and the society AND get paid so much money? :rolleyes:

Who want to do the sweat work that will benefits man-kind (e.g. in engineering and technology development) but get paid comparatively "peanuts" now? :doh:


Exactly. I have always maintained its not productive for any economy to be so obsessed with ppty and ppty speculation makes it seems easy money. This is akin to the discovery of black gold in some african countries and their inability to handle these easy riches.

For some developers, its normal to have ppty since their initial core business (bookshops, wet markets) needs space. Instead of being tenants, owing their own shops or market space help these businesses manage their business costs. Otherwise, they are subjected to uncertain rental costs.

However, with the potential of easy money from ppty development, the initial core business seems unattractive with low returns. The incentives to innovate their core business takes a back seat and eventually gives way totally to ppty development.

I feel these small time developers, if they do fail, has only themselves to blame. I agree with ecimbew, `who cares?'

[kane]

i think the authorities should take steps to limit the amount of 1 bedders and studios being built as this might become one more reason for young couples living in them to procrastinate having kids.

and when our own birth rate falls, the pressure to rely more on foreigners grows.

the smaller developers should learn to compete building proper 2 & 3 bedders as well rather than always taking the easy way out and building MM.

[Geylang OKT]

our mm king oredi flipped few times....cash in the pocket liao....wat can u say?:p

Unless we were born to be midgets or dwarfs, I would say a big NO to such units :tongue3: :cool: :D

[Geylang OKT]

our mm king oredi flipped few times....cash in the pocket liao....wat can u say?:p

The analogy would be the early birds in the scheme of things like the Sunshine Empire scam ;)

[rattydrama]

untested ground. better hit and run or touch and go. :2cents: :2cents:

[mcmlxxvi]

The analogy would be the early birds in the scheme of things like the Sunshine Empire scam ;)

Aiya property is not only about LOCATION LOCATION LOCATION.

People forgot about TIMING TIMING TIMING.

And now is *not* the time to buy MM - price is CRAZY. You know it when Pasir Panjang selling 1600-1700psf...

Those with limited capital - too bad you missed the boat liao.

[mcmlxxvi]

How about everybody aspired to be private bankers and work investment banking, invest here invest there and try to come out with misleading products to confuse people (e.g. structured deposits) that has no social and economic benefits to the economy and the society AND get paid so much money? :rolleyes:

Who want to do the sweat work that will benefits man-kind (e.g. in engineering and technology development) but get paid comparatively "peanuts" now? :doh:

Private bankers and investment advisors are no different from property agents. They make money regardless in any market. THEY ARE THE IN-BETWEENERS! You can easily find two-faced characters in such industries due to the nature of the job.

[mcmlxxvi]

It is precisely because the govt introduced so many property cooling measures that mm units become very attractive to small time investors (investors w/o endless cash flow). Consider 40% of a 500K mm unit = 200k vs 40% of a $1m 2/3 bedders = 400k. Furthermore, comparing between them, a 500K mm unit is more readily available as compared to a 1mil 2/3 bedders (almost extinct in most popular districts). As such, less $ and more availability in market definitely appeals to investors. Sigh! Go and sleep lah. :sleep:

Seriously - even for MM - where can you find a 500k FH one-bedder in a decent location today?

[devilplate]

Seriously - even for MM - where can you find a 500k FH one-bedder in a decent location today?
Only possible for those ard 350sqft types.... Decent sized 500 sqft no way man

[mcmlxxvi]

Only possible for those ard 350sqft types.... Decent sized 500 sqft no way man

Have... 8courtyards. But 'decent location'? Leave it to others to judge that.

[ysyap]

Seriously - even for MM - where can you find a 500k FH one-bedder in a decent location today?

8@ Woodleigh is at decent location but size is about 390 sf and its not FH. Asking about 530K now. It will appreciate further when Woodleigh MRT opens in another 3 months. May hit 600K in 6 months.

[mcmlxxvi]

8@ Woodleigh is at decent location but size is about 390 sf. Asking about 530K now. It will appreciate further when Woodleigh MRT opens in another 3 months. May hit 600K in 6 months.

Its 99LH. And its Studio not 1BR.

[devilplate]

Have... 8courtyards. But 'decent location'? Leave it to others to judge that.

this is LH too rite?

FH, 500sqft, gd layout, near MRT....i tink min 1200psf or 600k liao

[Wild Falcon]

That's the problem. Everyone also become property developer and do away from their core business. Sell jewellery one, sell newspaper one, sell pen and books, sell market, sell vegetables, sell chicken budget hotel, all suddenly become property developer and forget about their core business. Worst still, the only they know how to do is build MM and know nothing else. Sometimes I really wished some of these opportunists get burnt.


Launched 2-3projects in 1year much easier than selling books and pens...,Popular launched it's 3 property project at 8 Raja late last year...

[ysyap]

Its 99LH. And its Studio not 1BR.

I'm inclined to think that FH or LH, it really doesn't matter. For 2 simple reasons.
1. So long as its near MRT, prices will be super high. A LH beside MRT will fetch higher psf than a FH in an ulu place. Eg. Sunglade LH asking 1000 psf while Cherryhill FH can only command 800 psf and Rosalia Park also FH asking 700+ psf.

2. Also must consider age of development. Old condos even if near MRT also cannot match new condos' psf. Eg. Minton is not near MRT but asking 800+ psf even more than old FH Cherryhill near MRT. More ridiculous is H2O at Seng Kang asking 920psf and its not even near MRT at all.

[Geylang OKT]

lemmings cheong ahhhh :D