CDL Buys Residential Site in Singapore’s Upper Bukit Timah for $93M 

A unit of SGX-listed developer City Developments Ltd (CDL) has secured the rights to a pair of commercial properties in Upper Bukit Timah for S$126.3 million ($92.5 million), a move that could pave the way for a new condominium tower in the up and coming residential area.

CDL Aries, an affiliate of the largest non-government-controlled developer in the city-state, has been granted a call option to purchase two adjoining plots at 798 and 800 Upper Bukit Timah Road, in northwest Singapore’s Tan Chong industrial park, according to an announcement by car dealer Tan Chong International, which has been using the 16,620 square metre (178,900 square foot) property as an auto service facility.

CDL secured the rights to the site just seven minutes’ walk from the Cashew MRT station on Singapore’s Downtown Line just one day before the developer notched S$1.8 billion in sales at its Canninghill Piers condo joint venture with CapitaLand during the Clarke Quay project’s launch on the weekend of 20 November.

“After launching Canninghill Piers last weekend, it is not surprising that CDL has started to look at replenishing their inventory,” Ismail Gafoor, chief executive officer of Singapore real estate agency PropNex Realty told Mingtiandi.“This project will provide CDL with an opportunity to launch more residential units in the near future especially in the OCR (outside central region) region where there has been diminishing supply of new homes.”

Adding to Residential Pipeline

The seller of the 16,620 square metre (178,900 square foot) land parcel was Tan Chong Realty, the real estate arm of car dealer Tan Chong International, which announced the preliminary agreement last week. CDL declined to comment on its plans for the site.

The property is zoned for residential use with a plot ratio of 2.1, with the developer permitted to build a project up to 24-storeys in height on the prime plot.

If the deal is closed, the new property will allow CDL to add 375,690 square feet of new space to its 23 million square foot portfolio of residential, commercial and hospitality assets, in a city where recent land sales have witnessed strong competition and high premiums.

“The Bukit Timah area is long regarded as a highly sought-after address by many Singaporeans and investors,” Propnex’ Gafoor said. “The demand for homes in this area has always been robust due to its prestige, with a number of esteemed Good-Class Bungalow estates, high-end condominium developments as well as reputable schools being located in this area.”

The district is an “up-and-coming area to look out for” he said, thanks to multiple development plans rolled out to improve connectivity and add more green spaces in the neighborhood, including the Railway Corridor development where old railway tracks will be transformed into a community space, and the Beauty World rejuvenation plan that aims to set up a green urban village.

Upper Bukit Timah is home to schools, commercial spaces and parks, and the Tan Chong industrial park is just next to the 19-floor Hazel Park condominium building with easy access to transport networks and within a 13 minute walk of the old Bukit Timah railway station.

The set of properties Tan Chong is selling to CDL Aries had a collective fair value of S$95.9 million ($70.3 million) as of end-June and is currently leased until 31 March of next year.

Recovery Mode

CDL’s Upper Bukit Timah pickup follows the firm’s April acquisition of a 99-year leasehold site at Northumberland Road  through a joint venture with Hongkong Land affiliate MCL Land for S$445.9 million. The partners are now planning to launch the sales of a 407-home residential building on the site within the first half of next year.

The firm will also begin selling two more residential projects in the second half of 2022, including the 628-unit Tengah Garden Walk executive condominium and the 256 homes that will be integrated into the planned 46-storey building at 80 Anson Road, formerly the Fuji Xerox Towers.

While it continues to expand in the Lion City, the real estate giant has scaled down its presence in China after exiting its $1.4 billion investment from the cash-strapped Sincere Property Group in September to prevent further engagement with the bankrupt Chongqing builder.

The developer led by billionaire Kwek Leng Beng reported a S$32.1 million net loss in the first half of this year, after notching S$3.1 million in net income a year ago, but has received a boost in recent months as Singapore’s housing market recovers.

From January through the end of September this year, CDL sold 1,382 private homes worth S$2.5 billion, led by sales of luxury properties like the Irwell Hill Residences in District 9 and Amber Park in the lower East Coast area, as well as the mid-market Sengkang Grand Residences project.

Thanks to those sales, CDL could double its full year 2020 results when it sold 1,318 units worth S$1.8 billion, and the company sounded optimistic in releasing its latest financials this month.

“The group looks confidently towards a steady and sustained recovery, with better growth trajectory in the near-term horizon, given the high global COVID-19 vaccination rates, resumption of international travel and an overall resolution to push ahead to open economies,” CDL said in its quarterly business update last week.