Thye Hong family sells Garlick Ave GCB plot
Price of 101,550 sq ft freehold plot exceeds S$90m; land area is large enough for five or six bungalows
Sat, Sep 12, 2020
The Garlick Avenue property could yield five bungalows, each of which would cost between S$8 million and S$10 million to build.
PHOTO: GOOGLE MAPS
https://www.businesstimes.com.sg/rea...k-ave-gcb-plot
A DEAL is said to have been entered into for an old bungalow sitting on 101,550 square feet of freehold land along Garlick Avenue.
The price is above S$90 million, but the precise price and the buyer's identity are not yet known.
Located in the Garlick Avenue Good Class Bungalow (GCB) Area, the property is large enough to be subdivided for redevelopment into five or six bungalows.
The property is being sold by some members of the Lee family of Thye Hong, which used to make biscuits.
In the last few weeks, the property has generated buzz, as BT reported last week.
After providing for roads and an electrical substation, the net land area would be smaller, at about 81,240 sq ft.
Based on the minimum plot size of 1,400 square metres (about 15,070 sq ft) stipulated as a planning norm for newly-created bungalows within Singapore's 39 GCB Areas, the Garlick Avenue property would yield five bungalows.
It would cost between S$8 million and S$10 million to build each one (with a built-up area of between 12,000 and 15,000 sq ft), including the cost of the finishes and fitting out of the bathrooms and kitchens with upmarket brands.
So assuming the Garlick Avenue property is being sold for, say, S$93 million, the breakeven cost could be S$27 million to S$29 million per home. A brand-new bungalow of this size in the area would sell for S$30-32 million today, said some agents and developers.
This leaves a relatively small profit margin for a property development venture, said a seasoned developer. "My educated guess is the buyer is likely to be a high networth buyer, who may build his dream home or homes on the land parcel, rather than a developer," he suggested.
One alternative is to carve the area into six bungalow plots instead of five by not building a new road, and instead having long driveways for each house. However, this would eat into the usable land area for each bungalow - making it less attractive and hence, lowering its selling price.
GCBs are the most prestigious type of landed housing in Singapore because of the planning constraints to preserve their exclusivity and low-rise character.
Besides a minimum plot size requirement when carving land for new bungalows in a GCB Area, another restriction is that of a two-storey height limit (though an attic and basements are allowed).
Stipulations on site coverage control (total covered area as a percentage of the net site area) and setback to the sides and rear for a bungalow in a GCB Area are stricter than those for a bungalow in a non- GCB Area. There are only about 2,500 bungalows in the 39 GCB Areas.
The Garlick Avenue property is owned by Thye Hong Manufacturing, which in turn is ultimately owned by an entity whose shareholders are Lee Boon Leong and his sisters Lee Tuan and Lee Wah.
Mr Lee died earlier this year. The trio are children of Lee Gee Chong, the chairman of the Thye Hong Biscuit Factory. Mr Lee Gee Chong's father, Lee Choon Seng, set up many businesses, including Thye Hong Biscuit Factory.
Meanwhile, CBRE and Showsuite Consultancy have been appointed as joint marketing agents by Mediacorp to find a buyer for its former Caldecott Hill campus.
The slightly more than 752,000 sq ft site is within a GCB Area, although it is now zoned for civic and community institution use. This means the site will need to be rezoned for residential use, which will entail payment of a differential premium to the state. In addition, a lease extension premium would have to be paid to top up the site's lease to 99 years, from a balance period of about 73 years.
While the minimum plot size for subdividing residential land in a GCB Area is 1,400 sq m, Mediacorp is understood to have been advised by property industry players in the past few years that it would be difficult for a developer to find buyers willing to pay a big price quantum for a 99-year leasehold landed home.
In June, BT reported that the group has received advice from the planning authority that the property - bounded by Andrew Road, Olive Road and John Road - may be redeveloped into bungalows with plot sizes of at least 800 sq m or 8,611 sq ft - double the requirement for a bungalow in a non-GCB Area.
The property is expected to be launched by year-end through an expression-of-interest exercise.
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