Deals stay hot on bungalow fever

Source : Business Times – 4th Sep 2009

Good times continue to roll for the Good Class Bungalow (GCB) market, with some high-profile business personalities involved in the latest transactions. They include palm oil giant Wilmar International’s chairman and CEO, Kuok Khoon Hong, and Prima Group boss Bernard Cheng.

The latest deals have boosted the volume of GCB transactions between January and August this year to about 60 deals with a total value of around $900 million, surpassing the $830 million transacted in the whole of last year, latest figures from CB Richard Ellis (CBRE) show. The actual year-to-date numbers could be higher if caveats for some deals done in August have still not been lodged, suggest property market watchers.

CBRE’s director, luxury homes, Douglas Wong is now predicting record GCB sales totalling $1.2 billion to $1.4 billion for the whole of this year, encompassing 80-90 transactions – up from his earlier forecast of around $1.1 billion-$1.2 billion made just three weeks ago. Up to now, the highest full-year value of GCB transactions was achieved in 2006 – involving $1.23 billion across 119 deals.

Savills Singapore director of investment sales & prestige homes Steven Ming said that while the GCB market remains active, ‘buyers continue to approach purchases with measured optimism and are sensitive to price increases’.

Wilmar’s head honcho, Mr Kuok, and his wife are said to have bought two adjoining GCB properties on Victoria Park Road last month for a total of about $44.17 million. The couple paid about $24.5 million for No. 35 Victoria Park, a two-storey bungalow with a swimming pool; the price works out to $750 per square foot (psf) based on the land area of 32,688 square feet. The sellers are believed to be members of the Khoo family linked to Kimly Construction.

Mr Kuok and his wife also picked up the next-door property at 37 & 39 Victoria Park, an old single-storey bungalow, for $19.65 million or about $660 psf. The seller is said to be Ng Cheong Bian, son of the late Ng Bok Eng, dubbed ‘king of cloves’.

Both properties – Nos. 35 and 37/39 Victoria Park – have 999-year-leasehold tenure.

Bungalow market watchers say they would not be surprised if the Kuoks amalgamate the two plots for redevelopment into a plush new GCB on sprawling grounds of more than 60,000 sq ft.

DTZ is understood to have brokered the sale of both properties.

Last month, Prima Group boss Bernard Cheng is believed to have sold his freehold bungalow at Queen Astrid Park for $24 million or about $877 psf to Zain Fancy. A person bearing the same name was formerly head of Morgan Stanley Real Estate Investing for Asia Pacific and who late last year joined Och-Ziff Asia Real Estate as executive managing director and is based in Singapore. The entity is part of New York-based fund management giant Och-Ziff Capital Management Group.

Ho Tian Yee, managing director of Pacific Asset Management, is said to have picked up a bungalow at Astrid Hill in July for $20.5 million or $654 psf on its land area of about 31,360 sq ft. Meanwhile, 12 Bishopsgate, with a land area of around 16,550 sq ft, changed hands last month for slightly more than $19 million or about $1,150 psf.

The year began slowly for the GCB market with just three deals worth about $27.5 million in the first quarter. However, things soon gained momentum with around $432 million worth of deals done in Q2 and about $436 million in July and August.

GCBs are the creme de la creme of Singapore’s housing market, with stringent planning requirements. There are only about 2,400 such bungalows in Singapore’s 39 gazetted GCB Areas. ‘Liquidity, cheap financing and the general belief that the worst of the economic crisis is over are fuelling this run,’ says Savills’ Mr Ming.

‘Furthermore, it appears the wealthy are allocating a greater proportion of their investments to real estate. GCBs, being limited in nature but highly desired amongst the rich, become highly sought after.