2 strange developments in the property market

One is that it now takes developers launching projects within 6-7 months of securing the site.

Here'sfrom Macquarie:

There are more new players in the Singapore residential market, particularly in the tender of land sites sold by the government. Apart from the listed developers, over the past 2-3 years, there were more unlisted groups and small-cap listed companies in other trade sectors which
ventured into property development. Some of these groups either tender alone or in JVs with a few other groups.

Apart from a larger number of players, one clear trend is the faster asset turnover from the sites secured by the highest bidders. In the past, it typically took a developer 12-15 months before a project is launched for sale. Currently, it is not unusual to see developers launching
projects within 6-7 months of securing the site.

Since 2010, the listed developers under our coverage have lost market share to the smaller listed groups and unlisted players mentioned above. The combined market share was closer to 23% in 2011 and has fallen to 15% in 2012 YTD.

The Singapore land bank of the developers averages only 3.6 years. This means that the developers need to replenish their land bank, especially from the GLS programme. Here, competition is very keen, which will impact margins if the bid price for the land site is too
aggressive.



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