Large freehold condo site sold for $158m

In what is one of the biggest freehold condo site deals in the last 12 months, Lee Tat Development has sold a 207,000 sq ft plot at the end of Jalan Senang and Lengkong Tujoh, off Sims Avenue, for $158 million.

The buyer is a joint venture involving Hoi Hup and Malaysia’s Sunway group.

The purchase price works out to about $445 per square foot of potential gross floor area, including an estimated development charge of about $36 million.

The vacant plot is zoned for residential use with a 2.1 plot ratio (ratio of maximum potential gross floor area to land area) and a 12-storey maximum height under Master Plan 2008.

Credo Real Estate brokered the sale through a private treaty deal.

‘According to our records, this sale could mark the first large-scale freehold condominium site sold in almost two years, that is, since the tail-end of the active en bloc sale market of 2007,’ Credo’s managing director Karamjit Singh said.

‘Transactions of large private residential redevelopment sites belonging to a single owner are very rare,’ he added.

The last known sale of a site of this scale was that of No 97 Meyer Road, with a land area of 115,303 sq ft. It was sold by Della Lee to the Hong Leong Group in 2007 for about $201 million.

The buyer of the Jalan Senang site is looking to build a condo with a total of about 400 to 500 units.

‘At their purchase price, their break-even is expected to be around $800 psf, while they could expect to sell at about $900 psf on average,’ according to Mr Singh.

A spokesperson for Hoi Hup told BT that most units in the proposed condo will be two-bedroom apartments and two-bedroom- plus-study units.

‘Studios will form only about 10 per cent of units. We’ll also have three-bedroom apartments. Jalan Senang is a family-type area and the development will be more suitable for upgraders, rather than investors,’ she added.

The proposed condo is expected to be launch ready in six to nine months.

Hoi Hup and Sunway group have also teamed up to develop two Design Build and Sell Scheme (DBSS) projects for the Housing & Development Board – The Peak at Toa Payoh and City View @ Boon Keng.

The Peak, with a total 1,203 units, is about 85 per cent sold while City View, which has 714 units, is 95 per cent sold.

Lee Tat is said to have owned the Jalan Senang site since the 1970s and has been trying to sell the land for at least 10 years.

It was put up for tender in 1999 but is said to have failed to fetch an asking price of about $150 million.

Lee Tat is controlled by Ching Mun Fong, who has been a developer and property investor for more than five decades.

Source: Business Times, 22 Oct 2009