Evia Real Estate to sharpen focus on ECs, commercial real estate

Singapore

LOCAL developer Evia Real Estate will continue to focus on executive condominiums (ECs), while scouring for good buys in the commercial real estate sector as a means of building up recurring income, its managing partner Vincent Ong said.

"Where we're keen on is offices, shopping centres," Mr Ong told The Business Times in an interview. "ECs seem to be still palatable at this point of time. We do a fairly good job with our ECs."

Evia is presently marketing the 548-unit EC, OLÁ Residences, in Sengkang which it is co-developing with Malaysia-based partner Gamuda Land. Evia also recently submitted a bid for the EC land parcel Fernvale Lane in Sengkang, for which the public tender closed this week. Frasers Property emerged the highest bidder at about S$555 per square foot per plot ratio (psf ppr).

Past projects by Evia include EC developments Heron Bay in Upper Serangoon, Watercolours at Pasir Ris and Lake Life in Jurong, as well as private condominium Gem Residences in Toa Payoh.

But looking ahead, Evia is likely to steer clear of the private residential market for now, said Mr Ong, citing a supply overhang. According to data from CBRE Research, unsold inventory stood at 30,473 units, with at least 40 new project launches taking place in 2020.

The virus outbreak may also deter overseas buyers from coming to Singapore. Last year, mainland Chinese buyers accounted for nearly 20 per cent of new home purchases (excluding Singaporeans) in the core central region, CBRE Research shows.

"I see some dark clouds on the horizon," he said. "As a developer, I will probably stay clear of private residences... until there is some clarity."

On his wishlist is a loosening of some of the cooling measures, or at least for the government to tweak the additional buyer's stamp duty (ABSD) for developers based on the size of the project. "To sell a 1,000- or 2,000-unit project takes more time than a 10-unit project," he pointed out.

Developers are required to develop any residential site and sell all units in the new project within five years to qualify for upfront remission of ABSD on the land purchase price. If a developer fails to do so, it will have to pay the 25 per cent ABSD, with interest.

In the meantime, Evia is looking for "good buys" in the commercial segment, as the rental income would help even out any bumps from its property development business. In particular, Evia is looking for buildings where it can add value, such as by introducing smart features.

In April last year, Evia teamed up with listed retail and property group Metro Holdings to acquire a pair of Grade-A eco-friendly office towers, 7 & 9 Tampines Grande, for S$395 million. The 99-year leasehold commercial development has a net lettable area of about 287,596 square feet across two blocks of eight-storey office towers, with retail outlets on the ground floor.

Meanwhile, Evia plans to raise some S$600 million in 2021-2022 through a fourth Pan Asia Real Estate fund, which will deploy 70 per cent of its funds in Singapore and the rest across Asia Pacific. Some of its earlier funds have attracted investments from the likes of foundations, insurance companies and family offices.

Mr Ong, who was formerly CEO of Auric Pacific Foods, co-founded Evia with his partner Leslie Lim in 2010.

Evia currently has a portfolio totalling S$1.25 billion in Singapore and three logistics warehouses in South Korea with a combined value of below S$100 million. In addition, it is currently managing three private funds.

Ahead of the closure of e-applications for OLÁ Residences, Mr Ong had told BT that his expectations were "more muted" this time round as buyers might opt to stay home amid the Covid-19 outbreak. He also said that construction has not been disrupted by the virus outbreak since its contractors are from Singapore and Malaysia, while it gets its raw material supplies from Malaysia.

Like many other developers, Evia and Gamuda have taken the necessary precautions at their sales galleries, including temperature screening and recording visitors' travel history.

However, his concerns were unfounded. The EC received 1,163 e-applications, or more than double the 548 units available for the Spanish-themed project.

While the final pricing is likely to be announced in roughly two weeks, Mr Ong told BT that average pricing for the EC project could clock between S$1,100-S$1,120 per square foot (psf).

Between Feb 29 and March 1, some 4,000 visitors came to the show gallery where the EC's four-bedroom show flat is on display. Its two and three-bedder showflats will be available for viewing by March 20.

As the co-developers had opted for the HDB computerised balloting system, e-applicants will be grouped according to first-time and second-time buyers, and will be able to book units on March 21.