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Allgreen scoops up 2 Singapore land parcels after 6-year hiatus

It buys Royalville and Crystal Tower in the upscale Bukit Timah area for S$477.94m and S$180.65m respectively


ROBERT Kuok's Allgreen Properties has scooped up land parcels in Singapore for the first time in recent years through two collective sale tenders in the upscale Bukit Timah area.

It acquired Royalville for S$477.94 million and Crystal Tower for S$180.65 million, or land rates of S$1,960 per square foot per plot ratio (psf ppr) and S$1,840 psf ppr for the freehold sites respectively. The bullish bids came just after Singapore's central bank on Thursday joined National Development Minister Lawrence Wong in warning developers and homebuyers to proceed with caution.

Edmund Tie & Company, which marketed the two sites, said that competition for both was intense, with Royalville attracting a total of nine bids from local and foreign developers, and Crystal Tower drawing a total of 12 bids.

Most of the bids for Royalville, located near Sixth Avenue MRT Station, were well above the asking price of S$368 million, said Swee Shou Fern, senior director for investment advisory at Edmund Tie & Company.

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Allgreen is not new to the Bukit Timah precinct, having developed freehold condominiums The Cascadia and Bukit Regency, which were launched in 2007 and 1998 respectively. The last time Allgreen won a site in Singapore was in 2011, when it bought a 99-year leasehold plot at Upper Serangoon Crescent under the government land sales (GLS) programme for S$270.28 million, or S$291.39 psf ppr, which it developed into the 928-unit Riversails condominium. It has participated actively in GLS tenders lately but has not secured a site.

Allgreen's bullish bids this time are seen to be translated to an estimated breakeven price of S$2,500-S$2,600 psf for the Royalville site and S$2,400-S$2,500 psf for the Crystal Tower site. These could mean selling prices of S$2,800-S$2,900 psf for new units on the Royalville site and S$2,650-S$2,800 psf for new units at Crystal Tower.

In the pipeline

Some analysts reckon that Allgreen's bid for Royalville will now set the tone for the upcoming GLS tender closing at Fourth Avenue site on Dec 5, which means earlier projections are now thrown out of the window. Analysts were earlier expecting eight to 15 bidders for the Fourth Avenue site and the winning bid to come in at S$1,392-S$1,580 psf ppr in a previous poll by The Business Times.

"Allgreen's bid for Royalville becomes the new benchmark for Fourth Avenue site," said Savills Singapore research head Alan Cheong. But developers would have to price in the 99-year leasehold tenure of the Fourth Avenue site and their own urgency for land.

Some 25 residential sites sold in collective sales since 2016 have clocked up total value of S$8.4 billion. Colliers International head of research Tricia Song noted that this is 38.5 per cent of the S$21.8 billion transacted for all sites in the last collective sale wave of 2005 to 2007. "Barring any unforeseen events, there is probably room for more en bloc sales going into 2018," she said.

Though the government is likely to monitor market developments and land prices, it is unlikely that there will be a knee-jerk reaction to place a large number of sites on the Confirmed List in the upcoming GLS for the first half of 2018, Ms Song added.

Royalville's sprawling site spanning 16,181.5 sq m (174,176 sq ft) is expected to yield up to 323 residential units while the Crystal Tower site at Ewe Boon Road covering a land area of 5,619 sq m (60,482 sq ft) could be redeveloped into some 130 units.

Completed in the mid-1980s, Royalville currently comprises 55 apartments, 38 maisonette and 11 shops. Each apartment owner at Royalville will receive between S$3.09 million and S$3.76 million, while a maisonette owner will receive between S$5.42 million and S$6.64 million. Shop owners are expected to receive between S$5.67 million and S$10.38 million. At the 28-unit Crystal Tower, each apartment owner is expected to pocket gross profit of between S$6 million and S$6.6 million, while the penthouse owner will receive about S$12.3 million.

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