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Upswing in GCB land prices Expected to Continue

Bungalow at 63 Dalvey Road changed hands at $1,091 psf

RECORD prices have been achieved in several Good Class Bungalow (GCB) areas this year – a trend expected to continue as well-heeled investors move to snap up limited supply.

A freehold bungalow on 15,075 sq ft of land at 63 Dalvey Road was sold for $1,091 per square foot of land area, or $16.45 million, in March.

And the seller, Star District Development, is said to be asking $1,458 psf for the bungalow next door at 61 Dalvey Road, which sits on 15,081 sq ft of land.

Star District is controlled by low-profile Singaporeans currently based in Hong Kong.

The $1,091 psf fetched for 63 Dalvey Road is the highest unit price for a GCB since at least since 2000, industry observers say.

At Jervois Hill, Hong Leong Group is said to have recently sold seven GCB land parcels to a single buyer at prices of up to $800 psf, almost double the $408 psf at which it started selling the plots more than a year ago. Hong Leong is believed to have sold all 19 freehold plots.

The buyer who bought the seven plots is believed to be Vincent Tan Kim Yong, the chairman and chief executive of locally listed Advanced Integrated Manufacturing Corp. He is understood to have bought some of the plots jointly with his wife Teo Siew Ling.

He did not respond to BT’s calls yesterday.

The seven plots total more than 100,000 sq ft of land and changed hands for a total of more than $80 million.

Interestingly, some of those selling GCBs at benchmark prices have not exactly reaped huge profits, and possibly after long holding periods since they may have bought the properties at the height of the previous boom in 1996-97.

Star District waited a decade before selling 63 Dalvey Road for $1,091 psf of land area, having bought the property in April 1997 for $13.9 million or $922 psf.

Star District also picked up 61 Dalvey Road, for which it now wants almost $1,500 psf, at the same psf price around the same time.

In February this year, Star District sold 21 White House Park, which is adjacent to 61 Dalvey Road, for $14.35 million or $951 psf – only slightly more than the $14.2 million or $941 psf it paid for the property in July 1997.

Jones Lang LaSalle brokered the sales of 63 Dalvey Road and 21 White House Park and is still offering 61 Dalvey Road.

The firm yesterday launched a GCB at 35 Leedon Road on land of 43,927 sq ft. A two-storey colonial bungalow now occupies the plot, which can be subdivided for development into two GCBs. The indicative price is $39.5 million, or about $900 psf.

JLL is also marketing 17 Camden Park, which has a colonial bungalow on it, at an indicative price of $24.35 million or $800 psf.

The firm said that given the limited supply of GCBs, the real estate revival and new benchmarks set this year, expectations of GCB owners have gone up.

The 26 GCB transactions in the first quarter of this year totalled almost $292 million and reflect an average price of $577 psf, up 15 per cent from the $503 psf average for last year’s 128 deals totalling some $1.3 billion , JLL said.

Market watchers recall that as early as October 2003, GCBs were the first residential property segment to enjoy a recovery in transaction activity.

Buyers of these upmarket homes are typically captains of industry and CEOs, who are usually among the first to sense an improvement in the economy.

Looking ahead, JLL’s regional director and head of investments Lui Seng Fatt expects GCBs to continue to set new price benchmarks this year and beyond because of their scarcity value, especially for larger plots, and strong demand from high net worth investors.

GCBs were traditionally the creme de la creme of luxury housing – at least as far as prices go – until Sentosa Cove came along.

Bungalow plots in the upscale waterfront housing district have fetched land prices above $1,400 psf despite having only 99-year leasehold tenure, compared with typical freehold tenure for GCBs on the main island.

 Source: Business Times 12 Jun 07

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