(Bloomberg) -- Singapore looks set for another year of record-breaking property deals as developers flush with cash replenish their land banks.
Developers’ land purchases may reach S$16 billion ($12 billion) this year, squeaking past last year’s tally, according to Christine Li, a director of research at Cushman & Wakefield Inc.
Developers’ cash from home sales and bank financing may total S$22.9 billion, according to Li, a war chest built up when the property market was sluggish. Now, builders are bidding more aggressively for land as rising apartment sales and prices signal an end to a four-year downturn.
“Against this backdrop, land deals could continue to set record prices in 2018, especially for sites with little competition in the vicinity,” she said.
Signs the market is heating up:
- Frasers Property Ltd. in December paid a record per-square foot price for a residential site near the Singapore River.
- City Developments Ltd.’s winning bid last month for a river-front plot suggested the firm will need to sell units at a 20 percent premium to current prices in the area, according to Colliers International Group Inc.
“With the residential market on the cusp of a sustained recovery, developers are likely to continue replenishing their land banks, via public land tenders and private collective sales,” said Tricia Song, director and head of research at Colliers Singapore.
©2018 Bloomberg L.P.
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