Golf time between developers results in lower land bids: study

Winning bids fall by as much as 14% after informal interactions at the golf course.

It seems that downtime at the golf club is more than just for leisure, after a new study by NUS Business School revealed that top executives from development firms use their interactions in playing golf to acquire information for land bids.

The number of golf activities between executives increases upon the government’s announcement of a land sale, which results in winning bids that are 14% lower after such interactions, said the study.

After land sales are announced, developers up the frequency of golf games with other developers by 14% in the first week and 24% in the second week relative to the week before such announcements.

The study noted that whilst informal interactions allow developers to sell new units 8% cheaper, this spells bad news for the government due to lower land sale revenues.

The lower bid prices translate to losses in land sale revenue of more than $147m per year between November 2010 to May 2014. This corresponds to about 0.2% of the government revenues and about one percent of the total land sale proceeds on average.

Lower land transactions by informed bidders also generate short-term negative spill-overs to other properties in the vicinity, noted the study. The prices of neighbouring projects are about 9.9% lower within 30 days after the land auction results are publicised, with the decrease in prices lasting for no more than 90 days.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia