A consortium of local developers led by KSH Holdings has snapped up an ageing apartment complex along Singapore’s Serangoon Road for S$222.18 million ($160 million), striking a deal with the existing condo owners less than two months after the property hit the market through a collective sale.
Listed developers KSH and SLB Development, both announced to the local bourse on Tuesday that they, together with H10 Holdings, a private developer linked to Ho Lee Group and a Bhutan national, had agreed to purchase the Euro Asia Apartments, a freehold complex at 1037 Serangoon Road, with the agreed compensation representing a 2 percent mark-up from the tender’s guide price.
The developers plan to build around 172 new homes spanning up to 158,132 square feet (14,690 square metres) in gross floor area on the site of the current 84-unit property, according to the statement, as Singapore’s housing market continues to demonstrate strong demand.
The deal for the project in District 12 was announced just over one week after Kingsford Development and MCC Land struck a S$890 million deal to buy the Chuan Park condo complex in Serangoon District, as developers snatch up sites to quench Singapore’s thirst for new homes.
The consortium is paying the equivalent of S$1,313 per square foot of built area, inclusive of seven percent bonus balcony space, or around S$1.3 million per new home in the planned project, according to Mingtiandi calculations.
KSH holds a 49 percent stake in the joint venture, while H10 is taking a 36 percent interest and Lian Beng Group-controlled SLB has the remaining 15 percent.
The trio are teaming up again just seven months after the two listed property firms and H10’s parent firm Ho Lee Group joined with companies controlled by mysterious mainland investor Gordon Tang and his wife to clinch the mixed-use site of Peace Mansion apartments and Peace Centre commercial complex in District 9 in December 2021.
The KSH-led team is buying the 1990-vintage complex in the fifth attempt by its owners at a collective sale since they first put the project on the market in 2010 at S$142 million. The owners had tried again in 2018 at a reported S$200 million.
Limited Supply at the City Fringe
Low Choon Sin, managing partner of SRI Capital Market, the property agency which represented the owners in the sale, said the tender drew strong interest from developers, given the site’s location at the northeastern fringe of Singapore’s urban core and the limited inventory of unsold private homes in District 12.
“The site’s attributes further enhance the attractiveness to allow the developer to build an iconic high-rise residential development along the prominent Serangoon Road that connects the city and north-eastern region of the island,” Low said. “The sale of Euro Asia Apartments is timely to allow the developer an opportunity to replenish their land bank as well as injecting new housing units to meet the rising demand from the market.”
Composed primarily of three and five-bedroom units, the 10-storey complex is less than a 15 minute drive from the Orchard Road shopping belt or Tanjong Pagar in the central business district.
The tender was awarded on Tuesday with the deal expected to be completed in the next five months.
The successful sale of the Euro-Asia complex after four earlier attempts, is seen by advisors active in the market as an indicator of ongoing demand for new homes and developer confidence in taking on new projects.
“Notwithstanding the various government cooling measures, many Singapore developers are running out of development sites for their projects and the strong interest in Euro-Asia Apartment signifies the keen competition among the developers and the confidence in the economy,” said Norman Ho, senior partner at Rajah & Tann Singapore LLP, which acted on behalf of the owners of Euro Asia Apartments in the sale.
Shortly after Kingsford and MCC Land won the 444-unit Chuan Park condo complex earlier this month – in a deal considered to be the biggest collective sale so far this year – more condo owners have been offering their ageing buildings to land-hungry developers.
On Wednesday, Knight Frank announced that the owners of Orchard Bel Air, a 25-storey luxury complex near the upcoming Orchard Boulevard MRT station, are collectively offering their homes for S$587.5 million. The 1984-vintage property can be redeveloped into a luxury tower of up to 36 floors high covering 276,298 square feet of floor area.
“Singapore has already witnessed some increase in foreign buying interest with international borders opening this year,” said Chia Mein Mein, capital markets head for land and collective sales at Knight Frank. “We anticipate a further pickup in demand, particularly in the high-end residential market, which has not experienced as much price growth in the last two years when compared to suburban homes.”
Separate data from Cushman and Wakefield showed there were eight residential en bloc sites sold between January and mid-July at a combined value of S$1.4 billion. That figure already surpasses the S$1.2 billion in collective sales recorded in all of 2021.