Hoi Hup, Sunway Pay $600M for Paya Lebar Residential Site in SG’s Top Land Sale of 2021

A residential development project in eastern Singapore’s Paya Lebar area has sold by public tender for S$815 million ($600.2 million), marking the city-state’s biggest land deal of the year and signalling confidence in the housing market after new-home sales rebounded in October.

A joint venture of local property players Hoi Hup Realty and Sunway Developments bought a pair of adjoining freehold land parcels on Thiam Siew Avenue near the Paya Lebar Central commercial hub in District 15, with a goal of developing two luxury condo towers yielding more than 800 units, according to a statement.

“Thiam Siew Avenue is a popular and mature neighbourhood with strong locational attributes,” said Galven Tan, deputy managing director for investment sales and capital markets at Savills Singapore. “At S$815 million, the deal also marks the largest residential development site sold since July 2018.”

Hoi Hup and Sunway’s purchase in District 15 is their second major site acquisition in as many months, with the developer duo betting on the continued appeal of upmarket housing as Singapore officials anticipate accelerating economic growth and search for the off-ramp of the COVID-19 pandemic.

‘Rare’ Find in City-State’s East

The JV partners picked up 22 consolidated plots across a land area of 263,794 square feet (24,507 square metres). The combined sites can yield a maximum gross floor area of 738,624 square feet, which works out to S$1,103 ($812) per square foot of GFA for the consideration.

Savills Singapore was the exclusive marketing agent for the public tender, which closed on Thursday, while law firm Rajah & Tann acted for the vendors in the sale.

Wong Swee Chun, chairman and managing director of Hoi Hup, who also serves as chairman of the developer’s parent, Straits Construction, cheered the acquisition of what he dubbed a rare freehold site in Singapore’s eastern region.

“In today’s competitive real estate market, we are very confident of the demand for quality freehold developments, especially for these big freehold plots in District 15,” Wong said.

The two sites on Thiam Siew Avenue were sold primarily by Thiam Siew Avenue Investments and Wee Thiam Siew & Co, which form part of the estate of tycoon Wee Thiam Siew, who passed away in 1972, leaving his descendants a portfolio of properties around the city.

This latest project to change hands is within walking distance of two MRT stations, Paya Lebar Interchange and Dakota, and about 10 minutes’ drive from the central business district. The land can accommodate 414 and 393 units respectively for the north and south plots, based on an average size of 85 square metres (915 square feet).

Doubling Up on Deals

This week’s deal follows Hoi Hup and Sunway’s September purchase of the Flynn Park apartment complex in the Pasir Panjang area for S$371 million ($276.1 million) which set a mark for Singapore’s biggest collective sale of the year.

For a potential GFA of 291,820 square feet, the buyers paid roughly S$1,271 ($946) per square foot for the ageing 72-unit Flynn Park property near the Greater Southern Waterfront project.

Not to be outdone, developer UOL and joint venture partner SingLand in late October entered the winning bid of S$550.8 million for Watten Estate Condominium, whose residents had put the 1983-vintage building in leafy Bukit Timah on the block at a S$500 million reserve price. The deal would surpass Flynn Park as the biggest collective sale of the year upon closing.

A month earlier, lesser-known players El Development and Kingsford Development had emerged as the top bidders with a S$320.1 million tender for a pair of residential sites with commercial elements at Slim Barracks Rise in the One North new-economy hub.

Home Demand Bounces Back

Developers’ hankering for residential plots is in line with the Urban Redevelopment Authority’s announcement Monday that Singapore’s sales of new private homes (excluding executive condos) climbed 9 percent from September to 909 units in October, following two straight monthly declines as the city wrestled with an upsurge in COVID-19 cases.

Home sales by developers, including the hybrid public-private executive condo category, fell by 19.4 percent from September to 1,045 units last month. Despite the drop, the figure was still the highest for October in five years, indicating resilience in the property market, according to real estate agency OrangeTee.

Ismail Gafoor, CEO of PropNex Realty, pointed to an uptick in foreign homebuyers last month after the reopening of borders and the launch of travel lanes for vaccinated passengers as spurring the upsswing.

“Based on caveats lodged, in October, foreigners accounted for about 6.8 percent of buyers who bought new homes,” Gafoor said. This was one of the highest percentages since 2018, when foreign buyers accounted for 6.3 percent of new-home sales. Last year’s figure dipped to 3.8 percent.

Given the renewed momentum, PropNex predicts November’s new-home sales (excluding executive condos) to reach about 1,000 units, with sales for the whole of 2021 likely to exceed 13,000 units after reaching close to 10,000 last year.