Developers’ landbanks depleted by robust sales
The
Straits Times | March 30, 2013
Most have smaller stock
of units now despite bumper site release by Govt
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.
Martin Koh | 86666
944 | R020968Z
Sherry Tang |
9844 4400 | R020241C
Senior Sales
Director
DTZ Property
Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg