FOREIGN PARTICIPATION AND BIDDING STRATEGIES IN THE GLS PROGRAMME

Abstract

This study is an investigation into the growing participation of foreign developers in Singapore’s GLS, specifically on land parcels zoned as “white sites” and “mixed-commercial-and-residential”. The increasing rate of foreign developer participation in GLS and new benchmark land bids tendered have led to concerns that the real estate market has become more competitive than ever. In this research, the relationship between bidding behaviour of foreign developers and the bid prices tendered are assessed. Using information from URA and HDB, it showed an increasing trend of foreign developer participation over the years. Based on hedonic analysis, the results show that foreign developer participation has indeed caused an increase in bid prices. However, this does not necessarily translate into winning bids. Statistical analysis shows that the wining ratio of local developers still outweighs those of foreign developers. In addition, foreign developer joint ventures are found to submit more competitive bids as well, with a possible positive relationship on bid prices. Other interesting patterns and trends are discussed to provide a broader picture about the GLS mixed-use tender market. Dominant bid strategies adopted by foreign developers and steady joint venture partnerships are identified. It is evident that the bid prices submitted by developers are influenced by factors besides traditional location and site attributes. This study affirms the hypothesis that increased foreign developer participation in the local real estate market has indeed driven up bid prices tendered.