DEVELOPER �S BIDDING STRATEGIES IN THE GOVERNMENT LAND SALES TENDER MARKET

Abstract

The Government Land Sales (GLS) program is an important source of private residential development lands in the land-scarce island state of Singapore. Under this program, the government releases state land on 99-year leases for private sector developers to participate in the transformation of Singapore’s physical landscape. A first-price sealed-bid tender system is the main method involved in such state land sales. These factors, including a limited leasehold tenure and the sealed bidding format, make the competitive behaviors in the GLS tender market distinctive from those observed in the private land transactions. As an extension from past research works, this dissertation focuses on studying the behaviors of different developer groups in the GLS tender market. Based on statistical analysis, the primary results show that seasoned or the more active developers tend to submit bids consistently closer to the winning bids. They are also able to win with small margins to minimize winner’s curse. On the other hand, joint ventures appear to increase bidding aggressiveness of developers, especially during recessionary periods. In addition, some other interesting patterns and trends are discussed to provide a broader picture about the GLS tender market. First, some steady joint venture partnerships are identified. Second, there has been intensification in the GLS tender market overtime. Last but not least, the strategies and behaviors adopted by foreign developers are compared with those of domestic developers.