A pair of developers owned by Malaysian tycoon Robert Kuok have secured a prime mixed-use site in Singapore for S$700 million ($518 million), according to Singapore’s Housing and Development Board.
In the final round of a two phase tender, the partnership between Phoenix Residential and Phoenix Commercial, subsidiaries of Kuok’s Allgreen and Kerry groups, saw off a competing bid from local player Far East Organisation in a government tender to win the rights to build 95,010 square metres (1 million square feet) of residential and retail gross floor area on the site.
The Allgreen-Kerry bid works out to S$700 per square foot of gross floor area for the project at Pasir Ris Central, ten kilometres from Changi Airport on the east side of the island and only a 40 minute commute by metro to downtown.The Far East Organization bid had offered nearly S$677.78 million, or around S$662.75 per square foot for the project.
Building a Community Project in Northeastern Singapore
The 38,000 square metre (124,672 square foot) plot of land, which backs on to the Pasir Ris metro station, will be used for up to 480 residential units and around 360,000 square feet of retail space in a three-level mall, with the 99-year leasehold project scheduled to be completed no later than 2027, according to Cushman & Wakefield.
An earlier joint bid by Singapore Press Holdings and Kajima Development had failed to qualify for final consideration in the tender.
According to the HBD announcement, the development will incorporate a polyclinic and a town plaza with all elements designed to be “seamlessly” connected with the adjacent Pasir Ris MRT station and bus interchange.
Tenders for the project were invited in August 2018, and initially attracted a muted response. The HBD said concept proposals from the three developers were handed in by the December deadline, with only two of the bidders satisfying the Housing and Development Board’s qualification criteria and proceeding to the second stage of the tendering process.
Amenities Expected to Boost Project Value
Senior Director and Head of Research at Cushman Wakefield Singapore, Christine Li, expects that the Pasir Ris apartments will be well received because of their prime suburban location with direct access to the metro, and estimated that homes were likely to sell for upwards of S$1,500 per square foot.
“This site is unique in the sense that it’s an integrated development with amenities at door step,” said the analyst. “There hasn’t been such a project in recent years, the last being Bedok Residences launched in 2012.”
The Jovell Condo, in the same area but not so close to the metro, was launched last September and sold at around S$1,300 per square foot.
According to the Cushman and Wakefield analyst, the limited developer response to the tender may have been due to the conditions for the project, specifically the requirement that the winning bidder build the polyclinic and town plaza on a cost recovery basis, which would be “an onerous task” for the developers.
Singapore Housing Market Remains Uncertain
The purchase comes at a testing time for the housing market in Singapore, following a hike in stamp duty and the tightening of loan-to-value limits on residential purchases in July last year in an effort to cool the market, with a subdued residential market expected this year, according to research by Edmund Tie & Company.
Average residential prices in Singapore flatlined in the second half of 2018 with average resale prices for non-landed luxury and freehold condominiums in prime districts rising 8.6 and 7.8 percent respectively, according to the real estate consultants.
In figures released by the Urban Redevelopment Authority last month, private home sales by developers fell 17.8 percent from January to February.
The Pasir Ris Central tender is the latest Singapore buy for 95 year-old property baron Kuok who built his first Shangri-La hotel there in 1971, and now controls enterprises across Southeast Asia, through his family’s Kerry Group valued at around $40 billion.
Kuok’s most recent launch in Singapore is the ultra-luxury Fourth Avenue Residences, developed on a 199,479 square foot site clinched by his Allgreen Group for S$552.96 million in December 2017. Another Allgreen property, the Great World City mall in River Valley, is currently undergoing a S$50 million facelift due to be completed in time for the opening of the Great World metro station in 2021.