Koh Bros, Heeton clinch Westwood EC site

A joint venture between real-estate developers Koh Brothers Group and Heeton Holdings has clinched the mandate to develop an executive condominium (EC) site in Westwood Avenue in Jurong West.

The successful bid was $198.9 million, or about $382 per square foot per plot ratio (psf ppr) for the 99-year leasehold site. The 186,052 sq ft site across from Cleantech Park will yield a maximum gross floor area of 520,945 sq ft.

Specifics about the shareholdings in the joint venture have yet to be firmed up, The Business Times understands.

The development plan is for 480 two to five-bedroom residential units, to be completed in 2018.

Koh Brothers' managing director and chief executive Francis Koh said in a statement: "We are very pleased to have won this highly contested tender, given its attractive location and the ongoing transformation of the Jurong vicinity . . . There is also a limited supply of executive condominium developments in western Singapore, in comparison to other parts of Singapore.

"Hence, we anticipate that the development will enjoy strong interest from buyers, particularly from public housing upgraders and first-time owner-occupiers."

Heeton chief operating officer Danny Low said: "We are very pleased that today's award of the EC tender gives us an exciting opportunity to inject some discerning attributes of our higher-end projects in Singapore into the EC market, thereby, offering wider lifestyle choices to EC home buyers."

Koh Brothers and Heeton beat 11 other rivals to the project, pipping the next higher bid, from a partnership between City Developments and TID, by just 0.45 per cent.

In July 2013, a slightly better located plot in Yuan Ching Road drew 16 bids and a winning price of $419 psf ppr, which was a high for EC land.

The Westwood project will be the first in recent times in which second-timers or HDB upgraders will have to pay a resale levy of up to $50,000 to the Housing Board.

Buyers will also be subjected to a recently-introduced mortgage servicing ratio cap of 30 per cent that applies to direct EC purchases from developers.

Analysts had earlier estimated, based on the winning bid, that the break-even cost of the project will be about $750 psf. Assuming a 10 per cent profit margin, the target selling price could be around $820 to $830 psf.

Details of the bids for the Westwood site were reported a week ago; the lowest bid was $180.06 psf ppr by Sim Lian Land.

Shares of Koh Brothers closed flat at 30.5 cents yesterday, while Heeton stock last traded at 63 cents last Friday.

Source: Business Times – 16 January 2014