Singapore Property Tycoons Bet Big On Housing As Demand Heats Up

Billionaires Kwek Leng Beng and Wee Cho Yaw, among the richest real estate tycoons in Singapore, are placing big bets in state land auctions as the developers seek to replenish their land banks amid rising housing demand in the city-state.

A consortium led by Wee’s UOL Group submitted the highest bid of S$381.4 million ($288.2 million) for a 99-year leasehold residential site in the northern Singapore town of Ang Mo Kio. The UOL bid edged out the partnership of Kwek’s City Developments and MCL Land as well as a joint venture between Far East Organization, the privately held developer controlled by billionaire brothers Robert and Phillip Ng, and Japan’s Sekisui House.

The site, which is opposite the Bishan-Ang Mo Kio Park, drew a total of 15 bids, according to the Urban Redevelopment Authority, which handled the auction. With an area of 12,679 square meters, the plot can be developed with a maximum gross floor area of 31,699 square meters, it said.

Strong Demand

The strong demand for new residential sites isn’t surprising considering the buoyant demand for housing in the city-state even as Singapore continues to battle the recent flare-up in Covid-19 infections. Total private home sales in the Lion City climbed 16.9% to 8,100 units in the first quarter compared to the previous three months, government data showed.

“The robust property market has primarily been driven by a confluence of factors, including the low interest rate environment and the extra savings generated (by consumers who can’t travel) during the pandemic,” said Joel Ng, research head of KGI Securities. “Additional demand is coming from the need for bigger spaces as employers and employees adopt a more flexible office/home working arrangement.”

UOL plans to develop the Ang Mo Kio site into a 24-25 story residential condominium with more than 370 units, the company said in a statement. The project is well located near the upcoming Mayflower MRT station, which is slated to be completed later this year, it said.

“It’s a timely replenishment for our land bank,” Jesline Goh, UOL chief investment and asset officer, said in a statement. Goh said sales of the group’s existing projects are progressing well, with Avenue South Residence located just outside the central business district 65% sold and Clavon development in the western town of Clementi 80% sold.

UOL’s controlling shareholder Wee, 92, who has a net worth of $6.8 billion, was ranked Singapore’s seventh-richest person on the World’s Billionaires List published in April. Wee is also the chairman emeritus of United Overseas Bank, Singapore’s third-largest lender.

Another Auction

Another government residential site in Tengah Garden Walk in the Clementi area drew strong interest from seven bidders, according to the Housing Development Board, which handled the auction. Taurus Properties, an equally owned joined venture of City Developments and MCL, submitted the highest bid of S$400.32 million for the plot.

Taurus said in a statement it plans to build about 620 residential units on the 99-year leasehold Tengah Garden site across 12 blocks of 14-story buildings on the sprawling site with a total land area of 22,020 square meters.

“The demand for executive condominiums remains extremely strong and this augurs well for the development,” Sherman Kwek, group CEO of City Developments, said in a statement. Sherman is the eldest son of City Developments chairman Kwek Leng Beng, who was ranked Singapore’s 11th-richest person on the World’s Billionaires List with a net worth of $3 billion.

The strong bidding interest for these residential sites reflects the confidence in the Singapore economy given the government’s stimulus measures, CIMB Private Bank economist Song Seng Wun said. The government expects the economy to grow between 4-6% this year.

Such confidence has spurred the strong bidding for Singapore’s residential sites. Earlier this month, City Developments beat nine other developers for the much coveted mixed residential-commercial site on Northumberland Road near the Orchard Road shopping belt.

While the residential market has been doing well, City Developments Chairman Kwek has warned that the government may try to cool the market. “If property prices continue to rise, there may be a time that further cooling measures could be introduced to control the prices,” Kwek said at the company’s virtual annual shareholders meeting held on Monday.