GCB transactions making a comeback

Published June 04, 2013, Business Times

Recent deals include Simon Cheong's home which he is selling for $42.5m

By

Kalpana Rashiwala

Big deals: Knight Frank has put on the market a freehold bungalow in Peel Road in the Ridout Park GCB Area (above). It has also sold a bungalow at 82 Meyer Road (right) for $30.7 million via public tender. - PHOTO: URA

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Slow start this year

THE freeze in the Good Class Bungalow (GCB) market appears to be thawing, with a few sizeable transactions done lately.

Simon Cheong, the boss of high-end developer SC Global, is selling his home in Cornwall Gardens for $42.5 million. This works out to $2,051 per square foot (psf) based on the land area of 20,719 square feet. On the elevated site is the luxurious bungalow that Mr Cheong developed and which is understood to have five bedrooms (including a sprawling master bedroom) and a guest room - all ensuite. The two-storey house - which also has a grand staircase and a pool - is said to have a built-up area of about 9,000 sq ft.

Mr Cheong is expected to move into a brand new house on Swettenham Road, which be has built on a site of about 33,300 sq ft that he bought for $29.2 million in 2009 from BreadTalk founder and chairman George Quek.

Market watchers note that the $2,051 psf on land area fetched for Mr Cheong's Cornwall Gardens property is not far off the record $2,110 psf set last October for a transaction in a GCB Area. That was set when bungalow investor George Lim sold a Leedon Park property that he completed in 2011 for $33 million. Standing on 15,640 sq ft of land, the bungalow has six bedrooms and a pool. The two properties are a short distance from each other.

The buyer of Mr Cheong's Cornwall Gardens house is thought to be involved with a fund management outfit.

Other recent transactions in GCB Areas include a property in Chancery Lane, which changed hands for $28.5 million or $1,378 psf on its land area of about 20,688 sq ft, and a nearby bungalow in Bukit Tunggal Road. The latter fetched $17.5 million, which works out to $1,664 psf based on its land area of 10,516 sq ft.

In April, a bungalow in Brizay Park was sold for $24.5 million or $1,017 psf on land area of 24,090 sq ft. With a built-up area of about 10,000 sq ft, the property has six rooms, a big garden and a pool. Also in the same month, a property in Oei Tiong Ham Park traded at $20 million or $1,445 psf on its land area of 13,843 sq ft.

These five add up to $133 million but the tally for this quarter is still continuing. Talk in the market is that a bungalow in the Tanglin Road/Rochalie Drive area is changing hands at around $24 million. On site is an old house. The price reflects around $1,400 psf on land area.

Expectations are running high that more transactions will manifest soon.

Talk in the market is that active negotiations are underway for Wing Tai chairman Cheng Wai Keung's 84,839-sq-ft site in Nassim Road.

Various options are being considered, including acceding to some potential buyers' requests for subdivision of the site into smaller lots. The rectangular-shaped site with a 100-metre frontage can be subdivided into as many as five plots based on the minimum plot size of 15,069.46 sq ft for GCBs.

Prices are speculated to land somewhere between $2,500 and $3,000 psf.

Jones Lang LaSalle, which is marketing the property, declined to comment.

Based on CBRE's caveats analysis, some eight deals in GCB Areas totalling $180 million were sealed in the first quarter of this year. This was a marked slowdown from last year, when between $224 million and $359 million of deals were transacted per quarter.

Property agents attribute slower transactions this year to the January cooling measures. "There are still buyers, though not many. Sellers are not prepared to adjust prices except in cases where they want to move on," said RealStar Premier managing director William Wong.

Most sellers are not ready to trim prices as they would be slapped with additional buyer's stamp duty (ABSD) and lower loan-to-value limit if they were to buy a replacement GCB. "Prior to January, it was not uncommon to see people selling a GCB in a less choice location and replacing it with a better-located GCB. These days, however, most buyers are not existing GCB owners," he added.

KH Tan, managing director of Newsman Realty, said that in the first quarter, buyers were not prepared to make offers. "However, over the past month, I've seen more buyers ready to make offers - and they're not bad. Some are trying to settle the ABSD issue by transferring existing properties to their family members," he added.

Meanwhile, Knight Frank has put on the market a freehold bungalow in Peel Road in the Ridout Park GCB Area. The property has a land area of 15,504 sq ft and a gross floor area of about 8,000 sq ft. The two-storey contemporary-style bungalow has a basement level with state-of-the-art home theatre.

The sellers are expecting offers in excess of $30 million or about $1,950 psf on land. The expression of interest for the property closes on June 26. The property agency is also marketing by tender a two-storey freehold semi-detached house in Jalan Anggerek, off MacPherson Road. It sits on 3,732 sq ft of land. The sellers' price expectation is in excess of $5 million. The tender closes on June 25.

Knight Frank has also sold a bungalow at 82 Meyer Road for $30.7 million via public tender. The price works out to $1,203 psf on its 25,525 sq ft land area.