Perennial forms JV with Qingjian to develop former Goodluck Garden site

Thu, Apr 05, 2018

Jacquelyn Cheok


PERENNIAL Real Estate Holdings has entered into a joint venture (JV) with Qingjian Group to jointly develop the former Goodluck Garden residential site in Singapore.

Perennial said on Wednesday that it has through its subsidiary, PRE 9, entered into a 40-60 JV with China-based Qingjian Group of companies - comprising subsidiaries of Hong Kong-listed CNQC International Holdings and its minority partners - to jointly develop the site.

A freehold residential site, it has a land area of about 360,130 square feet (sq ft), and is located at No 32-46 on Toh Tuck Road.

Goodluck Garden, a former 210-unit residential development, was sold collectively to subsidiaries of CNQC for an acquisition price of S$610 million on March 8.

Perennial said that based on Urban Redevelopment Authority's 2014 MasterPlan, the site is zoned for residential use and has a gross plot ratio of 1.4 times, which translates to a maximum permissible gross floor area (GFA) of about 504,182 sq ft or 554,605 sq ft (based on the maximum permissible GFA and including a 10 per cent bonus balcony GFA).

Accordingly, the acquisition price translates to a land price of about S$1,210 per sq ft per plot ratio (based on the maximum permissible GFA), said Perennial.

"Due to a high development baseline, no development charge is payable for the 10 per cent bonus balcony GFA, thus providing certainty to the land price which works out to a lower S$1,100 per sq ft per plot ratio."

Perennial's capital commitment (based on the acquisition price and stamp duty payable) for its 40 per cent stake in the JV amounts to approximately S$96.5 million, which will be funded by a combination of internal cash and bank borrowings, the company said.

Pua Seck Guan, chief executive officer of Perennial, noted: "The relatively large freehold site with excellent transport connectivity in prime District 21 provides significant room for the creation of a development with comprehensive offerings and long-term investment value."

Perennial added that this "prime project" would mark its maiden foray into pure-play residential development. On Wednesday, its shares closed 0.59 per cent or 0.5 Singapore cent lower at S$0.85.