SingHaiyi Group has set the highest bid for the largest new residential project sold in Singapore over the past four years, with the developer controlled by mysterious mainland tycoon Gordon Tang offering S$1.28 billion ($1 billion) for a plot which could yield up to 1,000 new homes along Katong’s Dunman Road, according to public tender results released on Thursday,
The same announcement revealed that a joint venture between UOL Group and its Singapore Land Group subsidiary had made the top offer for a separate residential parcel at Pine Grove in western Singapore’s Clementi area with a S$671.5 million ($489.6 million) bid for the 99-year leasehold parcel.
With developers enjoying strong home sales in the past two months, analysts saw the successful land tenders as evidence that the housing market is back to full strength after a slow-down following the launch of cooling measures in December.
“The strength of the top bid for the two sites suggests that developers remain confident of the market outlook and housing demand, encouraged by healthy home sales and as the stock of unsold new private homes hit record low,” said Wong Siew Ying, research and content head for PropNex Realty.
Katong Mega Condo
SingHaiyi’s bid for the 271,617 square foot (25,234 square metre) 99-year leasehold site gives it the rights to develop up to 950,680 square feet of space yielding up to 1,035 new homes, should its design pass muster with the URA.
The developer, which delisted from the Singapore Exchange in December, is offering the equivalent of S$1,350.50 per square foot of built space for the project near Singapore’s east coast, with analysts from Edmund Tie & Co estimating that homes in both projects could sell for $2,300 per square foot when completed.
Having only attracted two players, the top bid came in 20 percent higher than an offer of S$1.07 billion placed by a consortium of units of local builder City Developments Ltd, Hong Leong Holdings and TID Residential – a JV between Hong Leong and Japanese builder Mitsui Fudosan.
Wong suggested that the scale and sizable financial commitment that will be involved could have narrowed the field of bidders for the Dunman mega-project, and estimated that units in the building could sell for S$2,400 per square foot.
Lam Chern Woon, research and consulting head at Edmund Tie, said another factor limiting the Dunman Road project’s appeal is the development risk arising from the cooling measures imposed in December and rising interest rates should the project not sell out within five years
“The mounting economic headwinds is another chief factor for the muted response for the site,” Lam said.
With both UOL Group and SingHaiYi having been among the most aggressive acquirers of new projects in Singapore over the past year, Lam added that the two companies, as well as some of the competing bidders, may have been encouraged by recent sales and projects further along in the pipeline.
“In general, the bidders can be characterised into one camp: they are making good traction on their current projects and are continually looking to build up their pipeline given the sustained confidence in the property market.”
UOL Heads West
In Pine Grove the UOL-Singapore Land partnership edged out four other tenders with a bid equal to S$1,318.27 per square foot of built space.
The contest was tighter for what is slated to be the first of two sites sold in Pine Grove under the government land sale calendar, as the UOL Group’s S$671.501 million offer was just S$800 more than the second highest bid of S$671.5 million placed by Allgreen Properties, a local developed controlled by the Kuok Group and a sister company of Kerry Properties and Shangri-La Hotels.
UOL group chief investment and asset officer Jesline Goh said the JV is planning to build a 520-unit residential development on the 242,565 square foot leasehold site with the finished complex set to span up to 509,380 square feet of homes.
With UOL having won an October tender for a project in the Bukit Timah area with a $408 million bid, Goh said the group is expecting strong demand for the Pine Grove project, as the neighbourhood is prized as a private residential enclave linked to major roads and closed to schools including Henry Park Primary School and Pei Tong Primary School.
“It is also in close proximity to the School of Science and Technology, One-North and the upcoming Clementi Nature Trail. Retail amenities like Holland Village, The Clementi Mall and The Star Vista are under a 10-minute drive,” Goh said. “Given the site’s strong attributes, we expect to see keen interest from both homebuyers and investors.”
In addition to the Bukit Timah project, another UOL Group JV in May last year won a site near the Mayflower MRT station and Lower Peirce Reservoir Park for $287 million.
Kheng Leong, a developer controlled by the family of UOL and UOB patriarch Wee Cho Yaw has also been active, with the private firm buying a bungalow site on Gilstead Road for $52 million in February and snapping up the 21 Anderson project in District 10 in September last year for $158 million.
Projects Lined Up
SingHaiyi has also been in acquisition mode in recent months, with the Katong project set to add to a string of development projects taken on by companies controlled by Gordon Tang and his family over the past year.
In April, Chip Eng Seng Corp, together with a joint venture between SingHaiyi Group and Haiyi Holdings, all three of which are controlled by Tang and his wife Celine, agreed to acquire a one-fifth interest in Perennial Holdings’ AXA Tower office project at 8 Shenton Way at a value of S$353 million.
That commercial deal came after CEL Development, a wholly owned unit of Tang’s Chip Eng Seng, Sing-Haiyi Crystal, a 50: 50 joint venture of SGX-listed SingHaiyi Group and Haiyi Properties, both of which are controlled by the Tangs; and Ultra Infinity, a company equally held by builders KSH Holdings, SLB Development and Ho Lee Group teamed up to buy the Peace Mansion at 1 Sophia Road in District 9 for S$650 million last December.
In the middle of last year, SingHaiyi and its Chip Eng Seng affiliate, alongside Tang-controlled vehicle Chuan Holdings, won the Maxwell House site in Singapore’s Tanjong Pagar area for S$276.8 million, where the JV plans to build a 13-storey commercial development.