Property - Keen bidding interest for Martin Place site reflects developers long-term positive outlook
- The tender for Martin Place residential site (District 9) closed yesterday with a total of 13 bids received.
- GuocoLand's unit First Bedok Land Pte. Ltd emerged as the top bidder for the site with a bid price of SGD595.1m or SGD1,239 psf ppr. The top bid was just 1% higher than the second highest bid from a four-way consortium involving Hong Leong Holdings' Intrepid Investments, City Developments' unit Verwood Holdings, TID Residential and Garden Estates.
- The tender also saw active participation from other major Singapore developers which includes MCL Land, CapitaLand, UOL Group & Singapore Land, Allgreen Properties, Wing Tai and Far East Organisation.
- The total number of bids and the top bid well exceeded ours and market expectations reflecting developers long-term positive outlook and their need to replenish depleting landbank.
- With the recent pickup in demand for new launches and active bidding seen in GLS tenders we believe the likelihood of government relaxing any cooling measures in the near-term is low.
- Overall, we expect the trend of price discounts to continue to boost sales volumes for 2H16 and expect prices to decline by 3-5% in 2016.
- Maintain NEUTRAL on the sector and prefer well diversified developers with stock specific catalysts.
- Our Top Pick for the sector is City Developments (CIT SP, TP:SGD9.04).
Vijay Natarajan
RHB Invest
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http://www.rhbinvest.com.sg/
2016-06-29
