Shares of City Developments Ltd (CDL) edged lower by 0.6% to S$9.57 at Friday's close, as the market assessed the property developer's aggressive S$709.25 million offer for a coveted land parcel in Tanjong Rhu. Despite the daily decline, the stock maintains a weekly gain of approximately 2%, trading close to its highest level in the past year.
Strategic Land Acquisition Amid Margin Pressures
The bid, submitted in partnership with construction firm Woh Hup, underscores CDL's strategy to replenish its development pipeline in Singapore. The offer of S$1,455 per square foot per plot ratio (psf ppr) for the 99-year leasehold site was the highest among four competing bids. The joint venture plans to develop around 520 residential units with an integrated childcare facility if awarded the project.
However, the high land cost presents a clear risk. In a competitive market where selling prices may not keep pace, such expensive acquisitions could pressure future development margins. The tender, which closed on February 5, has not yet been formally awarded by the Urban Redevelopment Authority (URA).
Market Sentiment and Broader Context
Industry observers note the close clustering of the top bids indicates sustained developer confidence and fierce competition for well-located sites. The broader Singapore market retreated on Friday, with the Straits Times Index falling 0.8% after a recent record-setting run.
Investor attention now shifts to CDL's upcoming financial disclosure. The company is scheduled to release its unaudited full-year results on February 27, followed by a briefing. This earnings report will provide crucial insight into the company's financial health and its capacity to undertake major new investments.