Guillemard site enbloc to Roxy pacific for $93m

The wholly owned subsidiary RL East of the property and hospitality company Roxy-Pacific Holdings would fork out $93 million to buy a freehold residential construction site between the MRT stations of Aljunied and Mountbatten.

The property covers a total land area of around 3,450 square meters (sq m) or 37,131 square feet (sq ft) and is situated at 217-223A Guillemard Road and 1-21A Jalan Molek. The site is made up of 15 adjoining two-storey terrace houses.

In the year to date, this will be the biggest private residential deal, said Shaun Poh, executive director of capital markets of Cushman & Wakefield (C&W).

For the planned construction of a part-five, part-eight-storey residential development, written approval has been received, said C&W, which brokered the deal. There is a five-storey cap established by the Urban Regeneration Authority for the side fronting Guillemard Lane, whereas there is an eight-storey limit for the side fronting Jalan Molek.

According to C&W, the suggested project would have 137 units and a cumulative gross floor space of around 10,625 sq m or 114,364 sq ft, including a 10% bonus balcony section.

A plot ratio of 2.8 is allowed for a residential construction on the site in a bourse filing on Thursday, Roxy-Pacific said.

A document for the deal was signed by RL East, but Roxy-Pacific did not reveal the name of the seller.

Roxy-Pacific added that the freehold site would be obtained by the acquisition of the 9,999-year leasehold interest in the 30-strata lots on the site.

In 2018, The Business Times announced that an unidentified investor had placed the site up for sale at an indicative price of $99 million.

Another upcoming freehold condominium, Arena Apartments, by Roxy-Pacific, is only a few minutes’ walk from the venue. It is estimated that the project at 20 Guillemard Crescent will be finished in August 2022.

Also in the vicinity is the newly opened 50-unit freehold condominium NoMa by Macly Company, launched along Guillemard Road in August.

On Thursday, C&W’s Mr Poh said the latest sale indicated the recovery of the trust of property developers.

He expects that, following the good take-up of recent project sales after the relaxation of travel restrictions in Singapore and other sections of Asia, more developers may enter the sector to replenish their residential land banks over the next few quarters.

Mainboard-listed Roxy-Pacific stock gained three cents or 0.6% to trade at 38 cents on Thursday at 2.13pm.

 

Guillemard Site Location

Located at 217 to 223 Guillemard and Jalan Molek, this site is located right in the heart of Geylang, Singapore district 14. It lies in the centre of 3 MRT namely Aljunied MRT, Dokota MRT and Paya Lebar MRT Station. At trip to Suntec City / Marina Bay Sands / Central Business District take about 10 minutes drive.

Nearby amenities include Paya Lebar Square, Old Airport Food Centre, City Plaza, Kinex, parkway parade and many more.

 

Potential of the Site

URA wants to rezone from ‘Residential/Institution’ to a current ‘Commercial/Institution’ zoning the region bounded by Geylang Road, Guillemard Road, Lorong 22 Geylang and Lorong 4 Geylang, excluding the property zoned Road plots, the lots fronting Geylang Road and Lorong 12 Geylang. Prominent properties in Geylang Road include Canaan which offers the best haven there is in Singapore. 

In brief, under the planned rezoning exercise, URA would not allow any further new residential ventures in the 14-hectare area at Geylang from Lorong 4 to Lorong 22. Residential projects that occur will stay as they are. Similarly, new residential developments in the region which have been accepted will continue to be developed. In the new district, residential usage is barred.

The overall plot ratio would stay at 2.8 (ratio of maximum gross floor space to land area).

“According to the URA, the rationale: “As further recent residential projects in the region, there has been a growing spill over between citizens and the various uses in the area of disputes and tension on the land. Thus in conjunction with the police and other authorities, our opinion is that it is appropriate to rebalance and moderate the development of the residential population between Lorongs 4 to 22 to mitigate tension with residential uses and prevent eroding the character of the city.’

In the lower Lorongs, there are more industrial operations relative to the higher Lorongs. The higher Lorongs have more suburban enclaves in contrast to the lower Lorongs. The planned rezoning, which will prohibit new residential developments, would allow for improved control of concerns resulting from competing uses and prevent the spill-over to nearby communities.

The rezoning is supposed to generally raise property prices in the location and spur mutual purchases.

Any residential property in the specified belt that would like to experience potential reconstruction would have to comply with the approved uses allowed in the new commercial/institution district.

There would be spill over impact from the allocated belt to the upper Lorongs as residential developers need to locate more land to construct new residential developments in that area if they wish to tap into potential prospects from the area and surrounding redevelopment areas. And investors would potentially find Geylang very lucrative with its current strong plot ratio of 2.8, freehold property and ‘cheaper to enblock’ lands.

In the upper Lorongs, there are several freehold residential assets that are older, smaller in scale and more cost-effective to build for developers. There may be any involvement from developers or owners in combining current suburban clusters into a joint renovation sales phase.

Provided that PayaLebarAirbase will be relocated to accommodate higher building ratios in the region by 2030, developers will begin to tap into these opportunities for economic reasons in the early years.

I foresee a significant effect on land prices in this precinct over the mid to long term.

 

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