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04-04-13, 17:57
http://www.straitstimes.com/archive/saturday/premium/money/story/developers%E2%80%99-landbanks-depleted-robust-sales-20130330
Developers’ landbanks depleted by robust sales
Most have smaller stock of units now despite bumper site release by Govt
Published on Mar 30, 2013
By Esther Teo Property Correspondent
ROBUST sales of new private homes have depleted the landbanks of most developers, amid a period of intense competition for new sites.
A survey shows that 16 of the 27 major builders have a smaller store of development land now, compared with January last year. The fall comes despite the bumper supply of sites released by the Government over the past year.
Moreover, 19 developers had fewer than 1,000 apartments left in their landbanks as of the end of last month, according to the survey by DTZ Research. A further seven developers had between 1,000 and 2,000 units.
The numbers do not take into account strong home sales this month, which should deplete landbanks even more.
A landbank comprises unsold units - including executive condominiums - from projects with planning approval and estimated number of units from sites yet to obtain approval.
Units in projects that have obtained their certificate of statutory completion, and redevelopment projects without planning permission, are excluded.
City Developments and its parent company Hong Leong Group have the biggest stock, with 6,383 homes - made up of land parcels in Sengkang and projects like D'nest and Bartley Ridge that are being built.
Most other developers have fewer than 2,000 units in their landbanks.
Second-placed CapitaLand has 1,699 units, and Hongkong Land and its subsidiary MCL Land have 1,605 units.
IOI Corporation, Allgreen Properties, Wheelock Properties and Frasers Centrepoint all have fewer than 1,000 units each.
Experts note that many landbanks have been eroded by roaring home sales over the past year.
Privately held Far East Organization fell from second to fifth spot within a year, with its landbank down from 2,592 units to 1,498.
Frasers' landbank fell from 1,951 units and third position in January last year to just 632 and 12th spot in the rankings.
CapitaLand, Keppel Land and Wheelock have moved up the league table after securing Government Land Sales (GLS) sites in the past 12 months.
At least two foreign players have also bucked the trend, gaining a larger market share by acquiring GLS parcels.
Chinese company MCC Land and Hao Yuan Investment have 1,484 units in total. This puts them in sixth position, up from 13th place last time.
While they are unrelated parties, their landbanks have been seen as one as they often work together on projects, DTZ noted.
MCL Land and Hongkong Land climbed from 13th spot to third this year.
DTZ's head of Singapore research Lee Lay Keng noted that the GLS programme was the main source of growth for developers that expanded their landbanks, while those that missed out on many sites went down the rankings.
As a result, most units in developers' landbanks are in suburban areas, where most GLS sites are.
"In general, a developer should have a few projects on hand, but the number of units that constitute a 'healthy landbank' depends on the scale of these projects and the size of the developers, their business models and risk appetites," noted Ms Lee.
Experts add that listed developers often face pressures to replenish their landbanks to bring in returns for shareholders, but high land prices and an increase in the number of bidders for GLS sites have thrown up challenges.
Tuan Sing Holdings chief financial officer Chong Chou Yuen noted that smaller contractors and groups of investors making their foray into development have made it more difficult to secure a site.
"Apart from GLS sites, one other area we might consider could be en bloc sites instead," he added.
[email protected]
Companies with the largest landbanks
CITY DEVELOPMENTS AND HONG LEONG GROUP
6,383 units
- including projects like D'nest and Bartley Ridge
CAPITALAND
1,699 units
HONGKONG LAND AND MCL LAND
1,605 units
Developers’ landbanks depleted by robust sales
Most have smaller stock of units now despite bumper site release by Govt
Published on Mar 30, 2013
By Esther Teo Property Correspondent
ROBUST sales of new private homes have depleted the landbanks of most developers, amid a period of intense competition for new sites.
A survey shows that 16 of the 27 major builders have a smaller store of development land now, compared with January last year. The fall comes despite the bumper supply of sites released by the Government over the past year.
Moreover, 19 developers had fewer than 1,000 apartments left in their landbanks as of the end of last month, according to the survey by DTZ Research. A further seven developers had between 1,000 and 2,000 units.
The numbers do not take into account strong home sales this month, which should deplete landbanks even more.
A landbank comprises unsold units - including executive condominiums - from projects with planning approval and estimated number of units from sites yet to obtain approval.
Units in projects that have obtained their certificate of statutory completion, and redevelopment projects without planning permission, are excluded.
City Developments and its parent company Hong Leong Group have the biggest stock, with 6,383 homes - made up of land parcels in Sengkang and projects like D'nest and Bartley Ridge that are being built.
Most other developers have fewer than 2,000 units in their landbanks.
Second-placed CapitaLand has 1,699 units, and Hongkong Land and its subsidiary MCL Land have 1,605 units.
IOI Corporation, Allgreen Properties, Wheelock Properties and Frasers Centrepoint all have fewer than 1,000 units each.
Experts note that many landbanks have been eroded by roaring home sales over the past year.
Privately held Far East Organization fell from second to fifth spot within a year, with its landbank down from 2,592 units to 1,498.
Frasers' landbank fell from 1,951 units and third position in January last year to just 632 and 12th spot in the rankings.
CapitaLand, Keppel Land and Wheelock have moved up the league table after securing Government Land Sales (GLS) sites in the past 12 months.
At least two foreign players have also bucked the trend, gaining a larger market share by acquiring GLS parcels.
Chinese company MCC Land and Hao Yuan Investment have 1,484 units in total. This puts them in sixth position, up from 13th place last time.
While they are unrelated parties, their landbanks have been seen as one as they often work together on projects, DTZ noted.
MCL Land and Hongkong Land climbed from 13th spot to third this year.
DTZ's head of Singapore research Lee Lay Keng noted that the GLS programme was the main source of growth for developers that expanded their landbanks, while those that missed out on many sites went down the rankings.
As a result, most units in developers' landbanks are in suburban areas, where most GLS sites are.
"In general, a developer should have a few projects on hand, but the number of units that constitute a 'healthy landbank' depends on the scale of these projects and the size of the developers, their business models and risk appetites," noted Ms Lee.
Experts add that listed developers often face pressures to replenish their landbanks to bring in returns for shareholders, but high land prices and an increase in the number of bidders for GLS sites have thrown up challenges.
Tuan Sing Holdings chief financial officer Chong Chou Yuen noted that smaller contractors and groups of investors making their foray into development have made it more difficult to secure a site.
"Apart from GLS sites, one other area we might consider could be en bloc sites instead," he added.
[email protected]
Companies with the largest landbanks
CITY DEVELOPMENTS AND HONG LEONG GROUP
6,383 units
- including projects like D'nest and Bartley Ridge
CAPITALAND
1,699 units
HONGKONG LAND AND MCL LAND
1,605 units