THE IMPLICATIONS OF SESDAQ ON THE PROPERTY DEVELOPMENT COMPANIES

Abstract

Most of the existing Real Estate Financing textbooks and research papers focus either on end-purchaser financing or project financing. In the course of this research, the author has not come across any book which deals with financing real estate development companies as a going concern. In Singapore, majority of the development companies are small. 70% of them have a paid-up capital of less than S$3.0 million dollars and 80% of them have only one or no project in progress as at November 1986. Their survival depends heavily on the property market conditions. In a demand-led market, opportunities are abundant, so too are the developers’ earnings. But in a depressed market, all activities are frozen to minimise holding costs and losses. Are there ways to end this ‘roller coaster ride’? This dissertation explores empirically the secret of earning stability and profitability achieved by certain development companies, with special reference to the benefits of equity financing and discuss the viability of SESDAQ as an avenue of equity financing for small and medium size companies in providing a lifecord to the surviving developers.