http://www.straitstimes.com/archive/...ntial-20150307

China developer's strategy: Zoom in on plot's potential

Kingsford founder explains high bids for two Upper Serangoon View sites

Published on Mar 7, 2015 1:13 AM

By Cheryl Ong


RISING land prices in Singapore have been a hot-button topic, with mounting interest from foreign players heating up land tenders.

But contrary to popular belief, foreign developers - the Chinese, in particular - do not invest "blindly" in Singapore, Shenyang-based developer Cui Zhengfeng, 56, told The Straits Times.

The founder of Kingsford Development said the difference lies in their investment approach.

"Of course, we have to first analyse the market's needs and demands. But when Chinese developers bid for land, they don't really prioritise how much they will profit from the development before working out how much they would want to fork out for the site," he said in Mandarin.

It is the "potential" of the plot that matters instead, he added, depending on the market's demand at that time.

"Do you want this site, and how much do you want to develop it? If everyone thinks this plot is worth this amount, then of course you have to bid higher if you really want that piece of land and prize that potential."

That strategy has worked well for Kingsford, helping it to secure two adjacent land parcels at Upper Serangoon View, where its latest project Kingsford Waterbay will stand.

The developer stunned the market in November 2013 with an offer of $522 per sq ft (psf) per plot ratio (ppr) for each plot. That placed it well beyond the expected range of $450 to $480 psf ppr and 13 to 16 per cent ahead of the competition.

Mr Cui said this will not stop him from launching his project at "affordable" prices.

Average selling prices at the 1,157-unit development will be between $1,050 and $1,150 psf, an adjustment from his initial expectations of $1,200 psf.

He believes it is pivotal to get the development's mix of price and concept right in order to sell units to buyers, who are highly selective today.

"It's not that some developments sell well because they are good or bad. Even if you have a good development and it's priced highly, there won't be demand," he said.

Kingsford Waterbay will have one- to five-bedroom apartments, six strata terrace houses and two strata semi-detached houses. The development will have its own childcare centre and six shops.

Mr Cui, who became a Singaporean citizen last year and owns three bungalows in Sentosa Cove, said the island's waterfront living concept was the inspiration for the condominium.

That was why he amalgamated both sites to form a single development with a 400m frontage of Sungei Serangoon.

Despite the slowdown in the property market, Mr Cui believes that demand will surface like "water overflowing a dam".

Buyers have shied away from the market for more than a year since the Total Debt Servicing Ratio rules made it harder for borrowers to secure a mortgage.

"They would have accumulated savings in the meantime, and genuine buyers will definitely come forward. The market is likely to be reaching the bottom with the cooling measures in place for some time now... You will never know when is the lowest point until it passes by, and then you realise that it's too late," he said.

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