City Developments: Future-proofing its business through sustainable projects

/ EdgeProp Singapore
October 25, 2019 5:00 PM SGT
SINGAPORE (EDGEPROP) - Mainboard-listed property giant City Developments Ltd (CDL) picked up the Top Developer Award at the EdgeProp Singapore Excellence Awards for 2019 on Oct 18 – the only developer to have walked away with that honour for three years running.
The company also bagged 12 other honours that night – including wins for residential projects Coco Palms, The Tapestry and The Venue Residences. Their luxury development Boulevard 88 also picked up the Sustainability Excellence Award for uncompleted project while The Criterion – an executive condos (ECs) project in Yishun – won the Top Development Award under the completed, non-Central area category.
Kwek Eik Sheng, group chief strategy officer (left), receiving the Top Developer Award for CDL (Picture: Albert Chua/EdgeProp Singapore)
It’s not surprising why many of the awards won were in the sustainability and top development categories. “For more than two decades, CDL has integrated sustainability into every aspect of our operations,” says Kwek Eik Sheng, CDL group chief strategy officer, who accepted the Top Developer award on behalf of the firm.
The developer has also been future-proofing its business through a three-pronged strategy as a developer, an asset owner and a corporate citizen, adds Kwek. “We develop green buildings, manage them in an energy- and resource-efficient way, and engage stakeholders on sustainable development.”

Six new launches in 2019

Including the preview of the 680-unit Sengkang Grand Residences on Oct 25, CDL would have launched six projects in 2019. “We will continue to work towards a sell-out position in the next one to two years,” says Chia Ngiang Hong, group general manager of CDL.
Sengkang Grand Residences is a joint venture between CapitaLand and CDL. It is an integrated development that includes a retail mall, community club, hawker centre, and childcare centre – all connected to a bus interchange and Buangkok MRT Station.
Sengkang Grand Residences is a joint venture between CapitaLand and CDL (Picture: CapitaLand/CDL)
This year, CDL participated in six out of nine residential development sites offered for sale under the Government Land Sales (GLS) programme. It won the Sims Drive GLS site tender at the end of March with a bid of $732 psf per plot ratio (psf ppr) – “the lowest unit land price for a private residential GLS site in 2019”, says CDL’s Chia. “We are definitely looking very closely into replenishing our land bank – but in a rational and disciplined manner and at the right price.”
Projects launched by CDL this year encompass a wide spectrum of the market: from Boulevard 88 at the top-end, catering to the well-heeled; to Piermont Grand, the only EC project launched this year, and popular with HDB upgraders as well as first-time home buyers.
Market leader
As a leading property developer in Singapore, CDL keeps a close watch on the pulse of the market, and times its launches accordingly. A good example is luxury condo, Boulevard 88. A redevelopment of the former Boulevard Hotel, Boulevard 88 is designed by Moshe Safdie, the renowned Israeli-Canadian architect behind the iconic Marina Bay Sands and Jewel Changi Airport.
Located on the prestigious Orchard Boulevard strip, the 154-unit luxury residences will sit on top of the flagship Singapore Edition Hotel, conceived by hotelier Ian Schrager in collaboration with Marriott International.
Jointly developed by CDL, Hong Leong Holdings and Lea Investments, 20 units with sales value of $160 million were sold in less than a fortnight. To date, about 80 units (52%) at Boulevard 88 have been sold at an average price of more than $3,800 psf. Meanwhile, all four penthouses in Boulevard 88 have been snapped up at prices ranging from $28 million ($4,927 psf) to $31 million ($5,125 psf), based on caveats lodged.
Boulevard 88 on Orchard Boulevard is designed by renowned architect Moshe Safdie (Picture: CDL)
“Similar to the fully sold Gramercy Park and New Futura – our two recent high-end projects in District 10 – we correctly identified the right time to do the sales launch for Boulevard 88 in March this year,” says Chia.
Another high-end condominium project is the freehold 592-unit Amber Park in prime District 15 in the east. It is a redevelopment of the former private condo of the same name.
Designed by award-winning architect Chan Soo Khian of SCDA Architects, a distinguishing feature of Amber Park is the recreational sky deck called The Stratosphere which features a first-of-its-kind, 600m jogging track. It soars 235 ft above sea level while connecting all three residential towers within the development.
Launched in May, more than 180 units have been sold at an average price of just under $2,500 psf.
CDL’s 592-unit Amber Park was the top-selling project in May 2019 (Picture: Samuel Issac Chua/EdgeProp Singapore)
Another luxury project launched by CDL this year is the 156-unit Nouvel 18, located in the posh Anderson Road-Ardmore Park enclave. Completed in 2014, Nouvel 18 was divested in 2016 through a profit participation scheme (PPS) platform. However, CDL is marketing the project on behalf of the investors in the PPS.
Designed by French architect and Pritzker Prize winner Jean Nouvel, the twin 36-storey towers of Nouvel 18 contain eight sky terraces. Units sold range from $5.7 million for a 1,765 sq ft, three-bedroom unit; and from $9.15 million for a 2,820 sq ft, four-bedroom unit. Most of the buyers are foreigners.
Luxury development Nouvel 18 is designed as twin 36-storey towers with eight sky terraces, and units have been popular with foreigners (Picture: Samuel Issac Chua/EdgeProp Singapore)
“Timing and experience are crucial factors,” says CDL’s Chia. “With over 55 years of experience, we are well-attuned to market trends and have been able to time our launches strategically to capitalise on the uplift across the different markets.”

‘Sensitive pricing’

Meanwhile, South Beach Residences – which sits on top of the JW Marriott Singapore – is part of an integrated development designed by acclaimed British architect Norman Foster of Foster + Partners and jointly developed by CDL and IOI Group.
Since the 190-unit luxury condo previewed during the Singapore F1 last year, over 50% of the units have been sold, according to Chia. Average transacted price is around $3,400 psf, based on caveats lodged as at Oct 23.
“Sensitive pricing is also important,” says Chia. “We price our projects attractively in sync with the value proposition of each project – from location to iconic design to quality interiors.”
South Beach is an integrated development designed by acclaimed British architect Norman Foster of Foster + Partners (Picture: Samuel Issac Chua/EdgeProp Singapore)
But it’s not just the high-end segment that CDL is catering to. For instance, the 820-unit Piermont Grand at Sumang Walk in Punggol, was launched in July. To date, more than 430 units have been sold at an average price of just under $1,100 psf. “It was in fact, the best-selling property launch for the year,” says Chia. “It was even before the enhanced grants came into effect.”
In September, the government introduced enhanced grants and raised monthly household income ceiling for ECs from $14,000 to $16,000. As a result, property consultants are expecting to see stronger demand for ECs as marginal buyers may now be incentivised to jump in.
“While we have seen more enquiries and interest following the government’s announcement, the conversion into sales will require time as these marginal buyers consider their finances and weigh their purchase options,” observes Chia. “We expect take-up rates for our EC to strengthen progressively.”

Revamping their flagship property

In the meantime, CDL recently celebrated the launch of the newly revamped Republic Plaza, the group’s flagship property built in 1996 and a landmark in the Raffles Place financial district. In April last year, Republic Plaza underwent an extensive $70 million asset enhancement initiative (AEI).
The flagship Republic Plaza which completed a $70 million asset enhancement exercise and facelift recently (Picture: Samuel Issac Chua/EdgeProp Singapore)
“This is the first major facelift since the building was completed,” says CDL’s Kwek. “Through the AEI, Republic Plaza has been transformed into a modern and vibrant destination in the CBD – renewing its standing as one of Singapore’s most iconic Grade-A office landmarks.”
Asset renewal and portfolio enhancement are key pillars of CDL’s GET (Growth, Enhancement, Transformation) Strategy, adds Kwek. “The revamp of Republic Plaza reflects our focus on rejuvenating our existing assets to unlock value and strengthen our recurring income stream.”

Strategic diversification

CDL has also embarked on strategic diversification. The UK is now one of CDL’s key overseas markets, besides China, Japan and Australia.
“We believe that sentiments in the UK residential property market will improve when the Brexit issue is resolved,” he adds. “We previewed our high-end Sydney Street residential project (in Chelsea) in May and the response was positive. For our Teddington Riverside project, we have been pursuing a leasing strategy as some of the blocks are still under development. We plan to complete the entire project fully before focusing on sales.”
In March this year, CDL also diversified into the UK Private Rented Sector (PRS) with the acquisition of a well-located freehold site in Leeds, a city located about 274km from London. The site, purchased for £15.4 million, has the potential to yield 664 rental units.
“Due to increased labour mobility and the growing popularity of renting, CDL sees strong growth potential for UK’s PRS, which is a key part of the government’s agenda to solve the UK’s housing supply-demand imbalance,” adds Kwek.
“Brexit is expected to have limited impact on this sector as demand is mainly driven by a wide spectrum of local tenants including young professionals and students,” Kwek continues. Therefore, the short-term uncertainties surrounding Brexit has presented CDL with opportunities to acquire “assets with deep value”, he adds.
For price trends, recent transactions, other project info, check out CDL's projects research page: Coco Palms, The Tapestry, Sengkang Grand Residences, The Criterion, The Venue Residences, Boulevard 88, Nouvel 18, South Beach Residences, Republic Plaza, Gramercy Park, New Futura, Amber Park, Piermont Grand
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