SINGAPORE (June 30): DBS says the increase in land supply would be positive for developers if they submit winning bids to replenish their land banks.

However, given increased competition from both local and foreign developers, DBS believes land prices will remain lofty.

This means developers who have already added to their land banks will have an advantage over the others.

Following robust land tenders and and dwindling unsold stock, the government has increased 2H17 Government Land Sales by 9% h-o-h to slightly more than 8,000 residential units to prevent the property market from overheating.

Announced on Thursday, the confirmed list increased 22% h-o-h to 2,800 residential units while the reserve list was up 3% h-o-h at 5,300 units.

(See also: MND injects more land for private housing as demand rises)

With the recent launch of the Beach Road commercial site, the government added another mixed development site at Sengkang Central next to Buangkok MRT station and 700 residential units.

Woodlands Square mixed development site saw the retail cap reduced to 3,000 sqm from 8,000 sqm in 1H17 while residential units increased by 40 units to 315 units.

There were no new sites for hotel/hospitality.

In a Friday report, lead analyst Rachel Tan notes that the government has released more sites in the central region which she believes would garner strong interest among the developers.

This includes Handy Road in the confirmed list and Cuscaden Road and Silat Avenue in the reserve list.

“Given robust sales in the CCR in recent times and limited new supply in the CCR region, we expect keen interest for these land sites,” says Tan.

Shortly after the release of 2H17 GLS, Monetary Authority of Singapore Managing Director Ravi Menon announced the cooling measures remain necessary and won’t be lifted any time soon.

(See also: Not yet time to ease property cooling measures, says MAS)

DBS’ top picks among the developers are UOL and CityDev which are trading at $7.68 and $10.75 respectively.