Kingsford Development has teamed up with a unit of state-owned conglomerate Metallurgy Corporation of China, to sign a deal for Singapore’s largest en bloc sale so far this year after making a S$890 million ($637.2 million) offer.
A notice sent out to owners of units in the Chuan Park condominium complex in Serangoon district on Friday invites them to a meeting on 25 July to receive an update on a sale and purchase agreement signed by the residential development’s collective sale committee with an unnamed buyer.
The invitation, which further references the reserve price of the project being lowered from the S$938 million sought in a tender exercise which ended on 26 April without receiving a qualifying bid, also promises fresh information on a timeline for the collective sale of the 444-unit complex.
Insiders told Mingtiandi that a joint venture between Chinese-owned local builder Kingsford and MCC Land, a Singapore property subsidiary of the mainland mining giant, have made the offer for the site near Ang Mo Kio that could yield up to 900 new homes, confirming an earlier account by local news site EdgeProp.
Keen Demand Expected
Should the Chinese joint venture partners win the approval of the owners of Chuan Park, they would be set to begin developing a new residential project spanning up to 841,236 square feet (78,153 square metres) of floor space, making their bid equivalent to S$1,058 per square foot of new construction, subject to regulatory approvals.
Located beside Lorong Chuan MRT station at 240-250 Lorong Chuan, Chuan Park dates back to 1984 and has around 55 years remaining on its 99-year leasehold land tenure. The site benefits from access to major transport networks like Upper Serangoon Road, the Central Expressway and the Kallang Paya Lebar Expressway.
Analysts expressed positive prospects for the new development, with Wong Xian Yang, head of research at Cushman & Wakefield in Singapore saying, “Assuming stable market conditions during project launch, we anticipate keen demand from buyers.”
ERA declined to comment on the deal while Mingtiandi’s media queries to Kingsford and MCC Land were left unanswered as of writing.
Following a failed collective sale attempt late last year, a fresh tender for the sale of Chuan Park was launched in March with the existing owners having already paid an upgrading premium of S$192.62 million which allows the buyer to boost the existing floor area by 7 percent.
The refreshed tender closed on 26 April without a bid which reached the reserve price, although the collective sale committee said at the time that they had received an expression of interest from a developer at S$860 million, and asked owners to agree to begin private negotiations based on that offer.
Chuan Park’s first launch in the collective sale market was in 2018 at an asking price of S$900 million.
En Bloc Sales Mount
Should the Kingsford-MCC Land joint venture win the rights to Chuan Park, it would mark the largest collective sale in Singapore so far this year, surpassing the S$868 million trade of the Tanglin Shopping Centre in February to Indonesian lumber tycoon Sukanto Tanoto’s Pacific Eagle Real Estate.
Citing data from Cushman & Wakefield Research, Wong said the Chuan Park deal would bring total collective sales of residential projects in Singapore to S$1.4 billion from January to mid-July. That sum is already 14 percent higher than 2021’s full year mark of S$1.2 billion.
The Chuan Park deal signifies continued developer enthusiasm for prime projects despite challenging economic conditions, according to Wong.
“Developers remain keen to landbank given low levels of unsold inventories and rising prices and rents,” Wong said. “However, this is balanced by rising development costs and risks due to rising inflation and interest rates. As such, developers remain cautious and selective in their bids for land.”
Follow Up Project
The Chuan Park venture marks a follow up collaboration for Kingsford and MCC Land, after the mainland duo teamed up to develop the Normanton Park project near Singapore Science Park in the Queenstown area, which completed sales earlier this month.
That project, which sold out all 1,862 units within a year and a half, consists of nine residential buildings of 24 storeys each near Kent Ridge Park and has repeatedly led condo sales this year. According to Urban Redevelopment Authority figures, condos in the project sold for a median price of S$1,864 per square foot in June.
Kingsford, which was founded by former mainland tax collector turned real estate entrepreneur Cui Zhengfeng, was the registered developer of the project, while MCC Land’s China Jing Engineering unit served as the main contractor.
In September last year Kingsford won a URA tender for a 142-unit residential project at Slim Barracks Rise with a S$162.4 million bid.
Home Sales Slide to Two-Year Low
Despite Normanton Park’s sales success last month, overall private home sales, excluding executive condos, declined by 64 percent to 488 units in June from 1,355 sales in May based on URA data released on Friday.
June’s total marked Singapore’s lowest monthly sales since May 2020, when the city was gripped by the coronavirus pandemic.
Last month’s performance was also down 44 percent compared to June 2021, while the 4,329 new homes sold during the first six months of 2022 amounted to just a third of the 13,027 units flogged by developers in the first half of last year.
JLL attributed the “lacklustre market” to a paucity of new launches and dwindling new home inventories as developers became wary following the imposition of government cooling measures last December.
Catherine He, head of research for Colliers Singapore expects the city-state’s residential market to slow down this year with fewer sales and home price growth softening to just 4 to 5 percent from the 10.6 percent increase seen last year.
“With residential prices at a historic high, rising mortgage rates and the higher cost of living will further reduce discretionary income, thereby reducing the affordability of homes,” He said. “As such, buyers are likely to turn more cautious and selective.”