With Singapore’s home prices continuing to climb despite a COVID resurgence, local developer UOL Group seized the chance to replenish its land bank by entering the top bid for a residential redevelopment site in the city-state’s lush Bukit Timah area.
In what would be the biggest collective sale of the year upon closing, UOL and joint venture partner SingLand prevailed Wednesday with a bid of S$550.8 million ($408.8 million) for Watten Estate Condominium, whose residents had put the 1983-vintage building on the block at a S$500 million reserve price.
UOL is the controlling shareholder of SingLand, and the partners hold respective stakes of 80 and 20 percent in the JV. Jesline Goh, chief investment and asset officer of UOL, said the group plans to develop a luxury project with about 200 larger-format units on elevated ground.
“The acquisition is a timely replenishment for UOL Group, as most of our projects are substantially sold,” Goh said Thursday.
Located at 36-44 Shelford Road near Singapore’s renowned Botanic Gardens, Watten Estate Condominium’s plot measures 220,241 square feet (20,461 square metres) and carries a gross plot ratio of 1.4, yielding a potential gross floor area of 333,004 square feet with the inclusion of an 8 percent bonus GFA.
Based on the maximum allowable GFA, UOL Group is offering to pay roughly S$1,654 per square foot of built space, with the developer permitted to build a new project up to five storeys tall on the site.
“The prime freehold site is located in the exclusive residential enclave at Watten Rise, which is within 1 kilometre (0.6 miles) of two prestigious primary schools, Nanyang Primary and Raffles Girls’ Primary schools,” Goh said.
Property consultancy JLL marketed the ageing property, which had previously been put up for sale in July 2019 at a reserve price of S$536 million.
Once completed, the transaction will eclipse Flynn Park near the Greater Southern Waterfront project as Singapore’s top collective sale of 2021. The homeowners of the 72-apartment Flynn Park at 18-22 Yew Siang Road sold the building for S$371 million ($276.1 million) at a public tender last month. The buyers were local property players Hoi Hup Realty and Sunway Developments.
The news of UOL’s triumph came after the Urban Redevelopment Authority reported that Singapore’s private home prices rose for a sixth straight quarter in the three-month period ending 30 September. Prices increased 1.1 percent over the preceding three months and jumped 7.5 percent compared with the same period one year ago.
Ismail Gafoor, CEO of local realty PropNex, said the private residential market enjoyed high sales volumes and increasing prices in the third quarter despite the retightening of pandemic measures as COVID-19 cases surged in the city-state.
“For the full-year 2021, we project that overall private home prices may rise by 6 to 7 percent, boosted by the economic recovery, positive market sentiment and upcoming launches in the central region,” Gafoor said in a press release. “In addition, the dwindling unsold stock — at 17,140 units as at the end of Q3 2021 — may also keep prices growing given the limited supply.”
In a Singapore market update, Knight Frank said it detected no significant drop in residential demand during the COVID-hit third quarter. Overall private residential prices are projected to increase by 7 to 9 percent for the whole of 2021, the agency said.