22/12/2023
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ST JUL 28, 2022, 6:37 PM SGT
SINGAPORE - Three Singapore developers are stepping up land banking via the collective sale market, with their latest tie-up being the acquisition of Park View Mansions in Yuan Ching Road for $260 million.
Citing higher costs, construction delays due to labour shortage and supply disruptions, as well as macroeconomic uncertainties arising from the spike in inflation and interest rates, Chip Eng Seng told the Singapore Exchange on Thursday (July 28) that, for the Park View acquisition, it is "prudent to manage these risks by collaborating with suitable partners whenever possible".
Singapore-listed Chip Eng Seng said its partners, KSH Holdings and SingHaiyi Group, are "familiar parties with whom it has forged good working relationships through past and ongoing development projects".
They partnered in a number of high-profile deals last year, including the $650 million collective purchase of Peace Centre/Peace Mansion last December. Other partners in this deal include Ho Lee Group.
In May last year, the subsidiaries of Chip Eng Seng, SingHaiyi and Hong Kong-listed Chuan Holdings acquired Maxwell House for $276.8 million, and earlier this week, Euro-Asia Apartments in Serangoon Road was sold to a KSH indirect subsidiary for $222.18 million.
Developers may form joint ventures to pool resources and cut development costs, Cushman & Wakefield's head of research Wong Xian Yang said.
Some developers are confident to re-enter the market now given the strong take-up of new launches including Piccadilly Grand, Liv@MB, and AMO Residence amid low unsold inventory, analysts say.
But Ms Tracy Goh, head of investment and collective sales at PropNex, noted that asking prices for some collective sale sites have increased, and it remains to be seen if developers will bite.
On Thursday, Chip Eng Seng announced that its unit CEL Development, together with Sing-Haiyi Pearl and TK 189 Development, were awarded the collective sale tender for the 160-unit, 99-year leasehold Park View Mansions. They intend to redevelop the site into a residential project with up to 440 units.
CEL's stake in the joint venture is 40 per cent, while Sing-Haiyi Pearl and TK 189 have an interest of 30 per cent each.
Sing-Haiyi Pearl is equally owned by SingHaiyi Group and Haiyi Holdings, which are controlled by Singaporeans Gordon Tang and Celine Tang - who are also Chip Eng Seng controlling shareholders.
KSH unit Kim Seng Heng Realty owns 66.67 per cent of TK 189, while Ho Lee Group holds the remaining 33.3 per cent.
Park View's previous collective sale attempt at $320 million failed in 2018.
Its $260 million sale price translates to a land rate of $1,023 per square foot per plot ratio (psf ppr), including the estimated differential premium and lease top-up to a fresh 99 years.
Located near Lakeside and Chinese Garden MRT stations, the development, which is within the Jurong Lake District, sits on a land area of 191,974 sq ft and is zoned for residential use with a gross plot ratio of 2.1. It can be redeveloped up to a gross floor area of 403,145 sq ft.
