Singapore’s Hong Leong Holdings has set a new record for purchases of government land sites in western Singapore after the privately held property arm of Hong Leong investments agreed to pay S$460 million ($338 million) for a plot in the Bukit Batok Planning Area.
Hong Leong, which is a privately held sister firm to Singapore’s largest home builder, City Developments Limited, joined with affiliate Hong Realty to purchase the 1.43-hectare Hillview Rise site from the city’s Urban Redevelopment Authority (URA) via a public tender. The Hong Leong Group offer bested eight other bids and set a new record price per square metre of gross floor area in Bukit Batok, which is home to the Singapore Zoo and is located northwest of the upscale Bukit Timah area.
Hong Leong Group Goes All in for Western Site
While the tender’s requirement regarding use of advanced designs and processes in the project development were challenging, the site received nine bids from eight entities, with six bidders eventually short listed.
“This award recognises our experience and readiness to adopt and use innovative construction technologies and methods to achieve high construction productivity and quality outcomes for our projects,” said Loke Kee Yeu, General Manager, Projects, Hong Leong Holdings.
Companies belonging to Kwek Leng Beng’s Hong Leong Group were involved in three of the six bids, with CDL teaming up with CapitaLand for two competing bids, Qingjian Realty and CSC Land Group also made offers on the site.
The tender was opened on 28 December 2017 and was concluded on 3 May 2018. The URA announced the award on 3 July.
Undiscovered but Convenient Area
Hong Leong’s Hillview Rise prize is approved for construction of up to 40,030 square metres (431,000 square feet) of residential gross floor area, and can be developed into up to 535 housing units. The winning bid translates into S$11,491 per square metre GFA for the 99-year leasehold property.
The 14,296 square metre Hillview Rise site is in the West Region of Singapore close to the Hillview MRT Station on the Downtown MRT Line, and about a 40 minute metro ride from Singapore’s Raffles Place finance hub.
The suburban area is mostly residential and close to the Bukit Timah Nature Reserve. It is also convenient to the Bukit Timah Expressway (BKE), the Pan Island Expressway (PIE), the Hillier Condominium, the hillV2 Mall, the Rail Mall and Junction 10 mall.
Previous residential URA tenders in Bukit Batok have generated strong interest but relatively low prices. In 2012, the 1.3 hectare Hillview Avenue site received seven bids and went for S$6,867 per square metre GFA. In 2011, a 1.5-hectare site in Bukit Batok received five bids and went for S$4,419 per square metre GFA.
URA Demands Innovation in Development
The tender was conducted under Singapore’s concept and price process, whereby two envelopes are submitted. In the concept portion, planning, design and construction methods were over-weighted in the evaluation–at 90 percent–and the track record of the bidders was under-weighted–at 10 percent. In the recent Holland Road and Sengkang Central URA tenders, track records counted for a full 30 percent.
The concept proposals for Hillview Rise were required to incorporate a number of features, including: Design for Manufacturing and Productivity Assembly (DfMA), Building Information Modelling (BIM), Virtual Design and Construction (VDC) and other advanced technologies.
The winning bid, from Hong Leong Group and related Hong Realty (as Intrepid Investments and Garden Estates), included Prefabricated Prefinished Volumetric Construction (PPVC), layout modularisation, Mass Engineered Timber, QR Code tracking and cloud-based logistics.
City Set to Auction Off at Least Four More Sites
The URA has already completed eight sales in 2018, three in February, four in May and Hillview Rise. One tender, Sengkang Central, is closed, two more are open (Dairy Farm Road and Jalan Jurong Kechil) and will be closed on 4 September.
The planning authority said recently that it will open at least four residential tenders in the second half of the year involving more than six hectares of land and 2,000 apartments. If the Reserve List, Housing Development Broad sales and ‘white’ sites are included, second half 2018 could bring 8,000 apartments into the market.