BIDDING BEHAVIOR OF REAL ESTATE DEVELOPERS FOR RESIDENTIAL LEASEHOLD LAND PARCELS

Abstract

This dissertation aims to provide a DCF Model that is used to evaluate the bidding behavior of real estate developers over a time frame of 2001 to 2011, with specific focus on new land sales from the Sale of Sites Program, for land parcels zoned non-­‐ landed residential and without any commercial component. Submitted bits were compared against the DCF valuation, and the results were presented on a company-­‐by-­‐company basis, for the top 10 real estate developers in terms of participation rates. Three notable trends were observed and listed as follows: Firstly, the studied developers have been more conservative in submitted bids in the 2008 to 2011 period, than the 2001 to 2003 period. Secondly, submitted bids generally follow an undulating trend with no clear identifiable indication of a company’s specific bidding strategy. Thirdly, developers generally submitted less aggressive bids in competitive bidding environment.