SINGAPORE - Real estate titan CapitaLand has plenty of gunpowder in its arsenal, and is looking to use it in Singapore's residential market.
CapitaLand president and chief executive Lim Ming Yan said that the property firm wants to be "a bit more aggressive in its approach" to the residential market in its home base.
"We are prepared to be more aggressive, but we remain disciplined," he said.
"If you are hoping for a bargain purchase in the Singaporean residential market, then you will never get anything. You have to put in your best attempt given your view of the outlook of the market, and not take the view that you can keep a lot of reserves, put in a price and hopefully you will get it at bargain price. It will never happen."
He made the comments at the company's results briefing on Thursday morning (Aug 3), responding to queries on CapitaLand's plans following its bullish bid for a mixed-use Bidadari site in the government land sales programme.
The site was awarded to a consortium linked to Singapore Press Holdings (SPH) and Kajima Development for S$1.132 billion, or S$1,181 per sq ft per plot ratio (psf ppr).
Through its subsidiaries, Blossom Commercial Development and Blossom Residential Development, CapitaLand came in fifth in the hotly contested tender, with a bid of S$958.1 million, which works out to about S$1,000 psf ppr.
"We are prepared to put our best foot forward in the Singapore residential market, but we have to remain disciplined, because we still need to generate a reasonable level of return for our shareholders," he said.
He noted that CapitaLand, which has about 43 per cent of its total balance sheet in China and 35 per cent in Singapore, has options in several markets, including China and Vietnam.
"It is an issue of whether you still want to go into a project that has got a certain risk/reward profile, that may not be justified compared with many opportunities elsewhere."
The real estate firm's bullishness comes off the back of a solid set of financial results. It posted a 97 per cent jump in second quarter net profit to S$579.3 million from S$294 million in the year-ago period on the back of divestments and revaluation gains.
Mr Lim said in the results briefing that "there are a lot of mixed signals" in Singapore's residential market.
"There is still a lot of liquidity in the market looking for a home to park the money. This is very much something that is liquidity driven, very much capital market driven, so we have to look at all these, and we have to balance ultimately the risk-reward of investing in a project like this in Singapore," he said.