Gordon Tang and friends want to build 440 apartments on the Park View Mansions site
Mainland investor Gordon Tang and his wife Celine continue to expand their Singapore real estate empire with companies controlled by the mysterious couple teaming up with a joint venture between local developers KSH Holdings and Ho Lee Group to purchase a Jurong East condo complex this week for S$260 million ($188 million).
CEL Development, SingHaiYI Group and Haiyi Holdings, all of which are controlled by the Tangs, together own 70 percent of a joint venture which agreed to buy the Park View Mansions complex overlooking Jurong Lake via a tender for collective sale by the owners in the condo development.
The partners plan to develop a new 440-unit residential complex on the site measuring at least 14 storeys high, according to a regulatory filing on Thursday. The purchase price for the 1998 vintage complex matches the auction reserve price and at the maximum permissible floor area of 403,140 square feet (37,453 square metres) works out to S$645 per square foot of accommodation.
For the Tang-held companies this latest purchase adds to their S$2.84 billion in project acquisitions and investments since the beginning of 2021, while KSH and Ho Lee Group teamed up for their second collective sale pick-up this week. All of the companies involved in this week’s transaction had partnered last December to purchase the Peace Mansion apartments and Peace Centre commercial complex in District 9 for $474 million.
Betting on the Lake
CEL Development, a wholly-owned subsidiary of mainboard-listed developer Chip Eng Seng which is controlled by the Tangs owns 40 percent of the joint venture, while SingHaiyi Group and Haiyi Holdings, a pair of private companies owned by the couple jointly holds 30 percent, and the KSH-Ho Lee Group joint venture holds the remaining 30 percent.
Gordon Tang and his wife continue with their buying spree
Subject to regulatory approvals, the joint venture partners are purchasing the two-decade-old complex together with a fresh 99-year leasehold on the land, according to the terms of the tender.
ERA Realty Network managing director of investment sales Tay Liam Hiap, who advised the owners of the 160 homes at Park View Mansions on the sale, estimates that units at the new project could be sold for around S$1,950 to S$2,000 per square foot given its unobstructed views of Jurong Lake and Jurong Lake Gardens and location within walking distance of the Lakeside MRT station on Yuan Ching Road.
Park View Mansions sits right beside the Lakeside Apartments which the Singapore arm of regional developer Wing Tai bought for S$273.9 million in an en bloc sale that closed in May. Hong Kong-based Wing Tai plans to knock down that 1983-vintage building to develop a 24-storey condo with over 300 units.
KSH said the upcoming development should benefit from enhancements at Jurong Lake District, as the government works to promote the area as a new commercial hub, as well as from a planned tourism development beside Jurong Lake which is scheduled for completion by 2028.
ERA, the sole marketing agent, launched Park View Mansions on the market on 20 June and achieved a sale in just over one month In 2019 the owners had tried unsuccessfully to market the complex for S$250 million.
The owners’ first attempt to sell Park Veiw Mansions was during the en bloc sale frenzy of 2018, which closed without bids even after the asking price was slashed by 22 percent from the original S$320 million target.
Tangs on the Move
The Jurong East deal is the latest in a string of Singapore real estate investments by companies controlled by Gordon Tang and his wife Celine, as they continue to pursue deals in the Lion City.
In April of last year Chip Eng Seng Corp, together with a joint venture between SingHaiyi Group and Haiyi Holdings agreed to buy a 21 percent stake in the redevelopment of the AXA Tower in Tanjong Pagar at a S$353 million valuation.
The Tangs followed up the next month by leading a consortium which acquired the Maxwell House project, which is also located near Tanjong Pagar, via a collective sale at S$276.8 million
Then in June the Tangs’ corporate entities followed up by purchasing a 30 percent stake in the 9 Penang Road office block from Suntec REIT, which counts Tang as its largest investor, for S$295.5 million, before waiting until December for their Peace Mansion acquisitions.
In June of this year SingHaiYi Group jumped back into the market with the S$1.28 billion purchase of a residential site along Katong’s Dunman Road.
Consortiums in Style
With inflation and other economic risks on the rise at the same time that new geopolitical concerns are emerging finding experienced co-investors to take on development projects remains the “prudent” approach according to KSH, which earlier this week teamed up with a unit of Ho Lee Group and SLB Development to purchase the Euro Asia Apartments on Serangoon Road for $160 million.
KSH executive chairman and managing director Choo Chee Onn
“The group is partnering with familiar parties with whom it has forged good working relationships through past and ongoing development projects,” KSH’s statement read. “The joint tenderers collectively have a good mix of experience in property development and/or construction works in Singapore, which is relevant to the redevelopment of the property.”
A separate statement from Chip Eng Seng echoed some of the same concerns, stating that “the company is mindful” of factors that could delay construction, increase costs or potentially slow down sales.
En Bloc Deals Reach S$1.9B
The latest pair of deals involving KSH and its partners bring the total residential en bloc sales to S$1.9 billion so far this year with 10 developments transacted since January, data from Cushman and Wakefield showed.
Rising prices of private new homes, robust performance of recent condo launches and a string of successful tenders have boosted confidence in the collective sale market according to Wong Xian Yang, research head for Singapore at the property services firm.
While the year-to-date transactions already surpassed the S$1.2 billion deals recorded in all of 2021, the 2022 total is still just a fraction of the S$10 billion in en bloc transactions in 2018. Wong said 2022 is “unlikely to be a blockbuster year” for the en bloc market with cooling measures in place and growing market uncertainty globally.
“We remain sanguine as developers continue ramping up their land acquisition activities in subsequent quarters as they are still looking to replenish their depleting land banks amid a rising and resilient market,” he said.
“However, en bloc activities could slow in 2023 due to rising unsold inventory on the back of more land purchases in the preceding year as well as widening price expectation between sellers and developers as demand could slow in tandem with an expected economic slowdown,” he added.
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