Bungalow with a view to smash price records

SINGAPORE - A privately-held investment vehicle controlled by Wing Tai chairman Cheng Wai Keung and his wife Helen has put its Nassim Road bungalow on a sprawling 84,839 sq ft freehold site on the market.

Jones Lang LaSalle - the sole marketing agent appointed to handle the sale of the property by tender - said the owners, whom it did not identify, are aiming to receive offers in the region of $250-300 million. This would work out to $2,947-3,536 per square foot (psf) on the land area.

Even the lower ends of the absolute and psf price ranges, if achieved, would set record prices for Good Class Bungalows.

In terms of absolute quantum, the highest transaction in a GCB Area was for $87.5 million in 2001 involving a 291,000 sq ft parcel in Swettenham Road in an asset swop deal between Singapore Press Holdings and Lum Chang, according to JLL's head of investments and residential Karamjit Singh.

On psf of land area basis, the record price for a transaction in a GCB Area was set in October last year when bungalow investor George Lim sold a Leedon Park property for $2,110 psf on its 15,640 sq ft land area. On Nassim Road itself, the highest psf price achieved was $2,000 psf in February last year when motoring tycoon Peter Kwee sold a 23,922 sq ft vacant plot a stone's throw from the Chengs' property.

Mr Cheng is understood to have held the property, at No 33 Nassim Road, since the mid-1980s. The family used to live in the bungalow.

Bungalow agents say the property has been informally on the market since last year with an asking price of at least $3,000 psf.

On site is an old bungalow whose tenant is moving away soon. The plot can be redeveloped into five GCBs. The rectangular shaped plot has a nearly 100-metre road frontage.

JLL said that the seller is prepared to receive offers for the entire 84,839 sq ft plot, or for either of two smaller parcels - 31,647 sq ft and 53,192 sq ft. The buyer of the former parcel may further subdivide the land into two GCB plots, while the latter parcel can be subdivided into three houses, notes Mr Singh.

Despite big-ticket bungalow deals drying up following the January cooling measures - which increased additional buyer's stamp duty rates and lowered loan-to-value limits for those with outstanding residential mortgages and seeking subsequent loans - Mr Singh is upbeat about interest in the latest plot on the market, citing its rarity value.

"A site like this comes on the market maybe once in 10 or 15 years. This is a large site on elevated ground, with a rectangular shape that lends itself to easy subdivision. It should appeal to a large family looking to consolidate their residences at one location - along Singapore's most desired GCB road name; as well as to newly-minted Singaporean billionaires who have yet to find their dream home. It may also interest a group of friends wishing to team up to buy the plot, subdivide it and live next to one another."

The existing bungalow on 33 Nassim Road has an in-ground swimming pool, and a full-sized tennis court. "The vacant grounds around it could even accommodate a par-3 golf hole!" said Mr Singh. Most big sites in Nassim Road have been subdivided over the years, leaving only five other freehold properties with land areas of at least 80,000 sq ft. "Out of these five, three are understood to be owned by foreign governments - those of Great Britain, Russia and Brunei's royal family," Mr Singh added.

Illustrating the rise in GCB prices, an analyst noted that in 2001, the British High Commission sold the sprawling Eden Hall gardens site for $50.4 million or $462 psf on a net land area of 109,059 sq ft. Mr Kwee teamed up with his friend Sam Goi for that purchase. The two men later split the parcel, with Mr Kwee taking a larger slice of about 63,300 sq ft, from which he carved out two plots. One was sold to Sukmawati Widjaja for $25.5 million or $647 psf in 2003 and the other last year to Tay Liam Wee, formerly chairman of Sincere Watch, at $2,000 psf.

Mr Goi, executive chairman of Tee Yih Jia, built his own residence on the neighbouring plot.

Based on CBRE's analysis of caveats data, 54 bungalow deals in GCB Areas were transacted last year for a total $1.17 billion. The first quarter of this year saw seven deals at $157.6 million, down from 11 deals at $256 million in Q4 last year. BT understands that this month a bungalow in Brizay Park sold for $24.5 million or slightly above $1,000 psf.

RealStar Premier managing director William Wong said viewing activity in the GCB market started to pick up again in the second half of March. "These days, we're seeing mostly smaller deals of $15 million or below, and buyers are mostly owner occupiers. We've seen a decline in investors in the GCB market," he said.

Despite weaker demand for GCBs, prices remain firm. "Mostly owners are deep-pocketed and will continue to hold unless they receive good offers. They have to take into account that if they were to sell their GCBs and buy replacement properties, they'll be slapped with higher ABSD rates and lower LTV limits," notes Mr Wong.

Nonetheless, he envisages more transactions later this quarter as buyers have a better sense of the overall property market direction.

The tender for 33 Nassim Road closes on May 16.

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