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November 22, 2007
Hot market smokes out solo land sites
19 single-owner plots worth $1.05b sold this year
By UMA SHANKARI

(SINGAPORE) With the property market running hot, it is not just
collective sales that have ballooned. Over the past two years, more
residential land sites owned by single owners were sold as well.

So far this year, 19 residential sites owned by single owners and
worth some $1.05 billion in all were sold to developers, data
provided by property firm CB Richard Ellis (CBRE) shows.

And in 2006, there were 15 single-owner land sales worth a total of
$865 million. By comparison, just four single-owner land sales worth
$303 million were done in 2005.

Market watchers say a property market that is strong and active will
bring out more sellers – both of the en-bloc variety as well as
single owners.

‘Collective sales have hogged the limelight of late, but the single-
owner sales have also been very active,’ says CBRE executive
director Jeremy Lake. ‘If you look at overall residential sales, you
will see that they have gone up too. So single owners are just
mirroring the overall market.’

Ku Swee Yong, director of marketing and business development at
Savills Singapore, says that in the case of those sites owned by
associations or clubs, members who were looking to sell might have
been able to convince those who were previously not in favour of
selling to change their minds, considering the prices that the
properties can now fetch.

‘When the price is better, they (those looking to sell) manage to
clear the hurdle,’ Mr Ku says.

The 19 sites sold by single owners this year include a few owned by
associations, including one sold by Chui Hui Lim Club. The club sold
a Keng Lee Road site to Sim Lian Group for some $115.8 million.

CBRE’s data also shows that this year, while there were a few large
single-owner sites that were sold, the bulk of the 19 properties
were small – with 10 of them going for less than $30 million each.

Market watchers attributed the increased interest in smaller sites
to new players in the property market. These smaller developers
generally do not have the resources to bid for en-bloc sites that go
for hundreds of millions dollars – the province of the likes of
CapitaLand, City Developments and foreign property funds.

‘When the market is good, it will attract new entrants,’ says CBRE’s
Mr Lake. ‘And you will find some people who will want to get into
the market, but might not be able to afford the big sites.’

Sesdaq-listed Tee International is an example of one new entrant
which has been snapping up smaller sites. The company, which has a
market capitalisation of $41.5 million, has been in the electrical
and mechanical engineering business since 1980. But since the start
of the year, Tee has been buying a string of freehold terrace houses
and apartments with plans to develop them into luxury ’boutique’
homes.

Among its purchases are three single-owner sites, CBRE’s data shows.
Tee acquired two single-owner plots in Cairnhill Circle in July -
one for $7.7 million and the other for $5.5 million. It also bought
a single-owner property in Thomson Road for $6.9 million in January
this year.

Similarly, Eastern Holdings, which publishes magazines, also picked
up two small single-owner sites in Grove Drive this year – one for
$12.5 million and the other for $10.3 million. The company is also
relatively small, having a market capitalisation of about $70
million.

Savills’s Mr Ku says that there are also some high net worth
individuals who are buying smaller sites, redeveloping them and then
selling them – all within a short span of time – to capitalise on
the property market.

These wealthy individuals were also adding to the demand for smaller
sites, he says.