Hongkong Land Singapore Unit Buys 49% Stake in CDL Project

Hongkong Land’s Singapore unit MCL Land is set to grow its portfolio of luxury Lion City condos by teaming up with local developer City Developments Ltd (CDL) for a four-tower residential complex project in the city-state’s lower east coast area.

Hongkong Land said in its unaudited financial statement released last week that it bought a 49 percent stake in a residential site in the Tanjong Katong area in February as it replenishes its landbank with a slice of a project which will yield up to 640 new homes in the upscale neighborhood. The partnership is a return engagement for MCL and CDL, which have now teamed up for three projects in the last two years.

According to a separate document from CDL, the development giant identified MCL Land as its partner in building a 590,000 square foot (54,813 square metre) luxury residential complex on a residential site that it won through a government land sale in January as home sales in the city continue to prove durable in the face of government cooling measures.

“We believe that the Singapore property market remains well-supported by resilient fundamentals such as an improving job market and strong household balance sheets,” a CDL spokesperson told Mingtiandi. “Residential sales have remained resilient in January and February this year, and although transaction volumes may likely see an impact from the property cooling measures in the near-term, we expect prices to remain stable and well-located projects with strong attributes will continue to be in demand.”

Betting on Singapore Residential

While the developers have yet to disclose details of the project, CDL said the partners plan to build four apartment blocks of up to 21 storeys high on the newly acquired 210,623 square feet and parcel in Jalan Tembusu.

The CDL spokesperson said that the Singapore-listed firm has already secured approval from local authorities for MCL Land’s participation in the development, and the partners plan to launch sales within the first half of next year and complete the project by 2026.

CDL paid S$768 million ($569 million) for the 99-year leasehold site at the intersection of Tanjong Katong Road and Jalan Tembusu, which is equivalent to S$1,302.26 per square foot of completed space. The developer is well acquainted with potential returns from condo projects in the area, with the Tanjong Katong site located halfway between its Amber Park and Butterworth 33 projects in the same area.

“Having launched and developed various projects in the vicinity including Amber Park, which is close to 90 percent sold, securing the bid for this residential site in the District 15 area is an excellent opportunity to expand our presence in this locale and create yet another enduring icon,” the CDL representative added.

The upcoming condo is also a few minutes’ walk from the Tanjong Katong MRT station along the Thomson-East Coast line and around a 20-minute drive to the city’s central business district.

CDL declined to disclose the estimated total development cost of the upcoming project saying planning is still in the early stages.

Longtime Partners

A Hongkong Land representative declined to specify the consideration it paid for its project stake, but said the company invested in the resident project “at land rate equivalent to their bid price.” Using that statement as a guideline the developer would be paying S$376.32 million for its nearly half-stake in the project.

The Katong project is not the first time that the unit of Jardine Matheson Group has tied up with Singapore’s largest non-government-backed developer for a condo project in the city, with CDL and MCL Land having jointly acquiring a 99-year leasehold site at Northumberland Road for S$445.9 million in April last year.

Then, just one month later, the duo teamed up in another government land sale tender to purchase a hybrid public-private executive condo site at Tengah Garden Walk near the future Jurong Innovation District and Jurong Lake District for S$400 million.