Charles & Keith family buys another GCB; total of 15 sold from Jan-May

Charles & Keith family buys another GCB; total of 15 sold from Jan-May

The first five months of this year saw 15 deals in GCB Areas totalling S$298.45 million, higher than 2016 figures

June 6, 2017

KALPANA RASHIWALA


THE family of the well-known handbag and shoemaker Charles & Keith has bought another bungalow in a Good Class Bungalow (GCB) Area.

Low Lay Eng, a shareholder of Charles & Keith and believed to be the mother of the eponymous group's founders, paid S$20 million for a bungalow along Chatsworth Road. The price works out to S$1,503 per square foot based on the freehold land area of over 13,300 sq ft.

Early last year, Charles and Keith as well as younger brother Kelvin teamed up to buy a bungalow in Mount Echo Park for S$22.25 million or S$1,322 psf on land area of 16,826 sq ft.

Other recent deals in GCB Areas include a property in Gentle Road in District 11 that went for S$22.5 million or S$1,211 psf on land area of over 18,570 sq ft. The property is built in black-and-white bungalow style. The house has a pool and lots of greenery.

Based on CBRE Research's compilation of caveats information up to June 2, the first five months of this year saw 15 deals in GCB Areas that totalled S$298.45 million, higher than the 12 deals that amounted to S$261.36 million in the same period of last year.

Among the deals that are brewing and hence not captured in caveats data yet, is the sale of two-thirds of 17 Leedon Park for around S$43 million or S$1,380 psf on land area of 31,211 sq ft. The buyer, who was granted the option earlier this year, is expected to exercise it soon; this follows in-principal approval granted recently for the subdivision of 17 Leedon Park into two plots - the plot that is in the midst of being sold and 15,668 sq ft for the balance land, which is on the market for private-treaty sale with an asking price of S$25 million or about S$1,600 psf. JLL is handling the sales of both plots.

Separately, an old property in Gallop Park is also being transacted, according to the grapevine.

CBRE Realty Associates' head of luxury homes, Douglas Wong, predicts that there will be 30 to 35 transactions in GCB Areas for the whole of this year - lower than last year's tally of 37 deals.

"The gap between sellers' and buyers' expectations continues to persist... sellers are more motivated to preserve capital and wait for market sentiment to improve. Prices are likely to be flat."

Realstar Premier Group managing director William Wong estimates that GCB prices have "come down marginally" between 3 and 5 per cent in the first five months of this year over the same year-ago period. He said this was partly due to a number of deals this year that involved bungalows with big plot sizes, which resulted in lower prices in terms of psf of land area.

Observers also note that another factor that has dragged GCB prices this year is that quite a number of the properties were bought for redevelopment; hence buyers paid purely the land price.

Mr Wong of Realstar noted that most of the GCBs sold this year have been on the market for a considerable period of time - one year or longer. "As such, these properties have to be priced lower than what the market commands, in order for them to stand any realistic chance of being sold."

That said, he argues that GCB prices will soon come to equilibrium and stabilise in the seond half. "Transactions should also be healthy going forward."

For full-year 2017, he expects the number of deals as well as total sales value to be about 20 per cent more than last year.

CBRE's Mr Wong noted that GCBs continue to draw interest from new Singapore citizens, especially those from mainland China.

Bungalows in GCB Areas are the most prestigious form of landed housing in Singapore, with planning conditions to preserve their exclusivity and low-rise character.

Only Singapore citizens are allowed to buy landed residential properties in GCB Areas under a policy change that took effect in the second half of 2012. On Sentosa Cove, a foreigner (whether a Singapore permanent resident or not) is eligible to seek approval to buy a landed home.

A non-citizen is allowed to own just one landed residential property in Singapore and that too for owner occupation only.

Based on CBRE's analysis of caveats information, six bungalows have changed hands on Sentosa Cove this year for a total of S$86 million.

This includes the sale of a water-way facing property along Cove Grove by Ezra Holdings founder and chairman Lee Kian Soo for S$14.5 million or S$1,259 psf on land area of 11,515 sq ft. It was bought by Ong Phang Hoo, project director at Lian Beng Group, in his personal capacity.

In addition to the six Sentosa bungalows for which caveats have been lodged so far this year, a property along Cove Drive has been sold for S$16.25 million or S$2,016 psf on land area of 8,060 sq ft. Deals are also ongoing for another two properties along Cove Grove, one of which will be changing hands for more than S$16 million.

According to Steve Tay, senior vice-president of the resale division at CBRE Realty Associates, "more than half of the bungalow deals done this year on Sentosa Cove involved buyers who are Singaporeans - including new citizens - who plan to live in the home while also holding it as a mid- to long-term investment property".

Based on CBRE's analysis, there were just four bungalow transactions in Sentosa Cove last year for S$64.5 million, based on caveats data.

However, there was also a bulk deal for the sale of the remaining 10 bungalows on Pearl Island, one of the five man-made islands in Sentosa Cove. This deal was structured through the sale of the entire equity of Ximeng Land (S) Pte Ltd, which developed the 19-villa project. The equity was sold by a Liu family from Beijing to SRIF Pte Ltd, fully owned by Leslie Lim and Vincent Ong, the co-founders of Evia Real Estate

The deal is said to have valued the 10 villas at about S$125 million. Landed homes in Sentosa Cove have a 99-year leasehold tenure.