From property agents to developers

/ The Edge Property
October 12, 2015 6:00 PM SGT
Are property development and marketing high-end homes an ideal combination? Bruce Lye and Benson Koh of SRI5000 tell us why it is.
Bruce Lye and Benson Koh, managing partners of SRI5000, a division of property agency SLP International, have just completed their maiden property development. It’s a semi-detached house at 2A Andrews Avenue, located off Sembawang Road and opposite Sembawang Park in the northernmost corner of Singapore.
Semi-detached house at 2A Andrews Avenue Road
“A lot of people said we were crazy to choose such a remote area for our first development,” recounts Lye. “But we saw it differently.”
They had honed in on Sembawang as the location for their first project because it is an established landed housing estate that has continued to see at least one or two transactions each month, despite the property cooling measures in place, adds Koh.
The house is a redevelopment of an old property that the owner had leased to a church, which had in turn converted it into a halfway house for the rehabilitation of ex-convicts. When it was put up for sale by the previous owner, the house had languished on the market for 2½ years before the duo grabbed it. “The house was old, and the moment you stepped in, all you saw were the 30 bunk beds across the room,” says Lye. “Many who came to view the property couldn’t visualise its potential, but we could.”
What’s more, 2A and the other houses with even number addresses on Andrews Avenue are of freehold tenure. The houses with odd numbers across the street as well as those on Sembawang Road all the way to Wak Hassan Drive and Wak Hassan Place at the northernmost shoreline of Singapore are predominantly 99- year leasehold as they were formerly state land sold by the Singapore Land Authority to developers for residential development. The freehold tenure was an added attraction for the pair at SRI5000.
Potential of a former eyesore
Koh and Lye purchased the house from the private owner in November 2013 under the new development company they created, namely SRI5000 Developments. According to Koh, the neighbours were “very happy” when they learnt that the duo had bought the property with the intention of redeveloping it into a family home. “The former house had been an eyesore, and now this property is the newest house in the area,” he says.
The halfway house was still in operation when they purchased the house. The church pastor had requested for a lease extension until an alternative space could be found to relocate the 60 occupants. Koh and Lye had acceded to the request, which worked in their favour since they had an additional five months to work out the design and plans for their maiden project.
They met every weekend on site to discuss the designs and plans for their project before construction began in April 2014. A conscious effort was made to ensure that all the rooms in the house are squarish and spacious. They even consulted a fengshui master to advise them on the optimal locations for the main entrance, swimming pool, windows, kitchen and even the lift. “We wanted to balance the fengshui aspects with a practical layout,” says Lye.
Their experience in marketing high-end condominiums and landed homes in prime districts, as well as bungalows in Sentosa Cove and Good Class Bungalows (GCBs), served them well. “We meet many landed homebuyers in the course of our work, and have seen a lot of nice homes, such as those in Sentosa Cove and the GCBs,” says Lye. “Understanding what the majority of buyers are looking for in terms of space utilisation allows us to build homes that meet the needs of [people] in this segment.”
Attention was also paid to the materials used, with Italian marble for the first level and timber flooring for the second and third levels. The house comes fully fitted with Bosch kitchen appliances, Grohe bathroom fittings, air-conditioning units and basic lighting in all the rooms, including the exterior of the house. The first level of the house has a 4m ceiling height, and the car porch can comfortably fit two luxury cars. Landscaping has also been done, with a privacy fence erected. The swimming pool at the rear of the house is a mineral water pool. More than $1 million was spent on construction alone.
As the new house on Andrews Road targets families, the developer has even provided customisation features for the addition of more bedrooms as the family grows, or for multigenerational living. Hence, a home lift is provided. The second level currently contains a master suite, an en suite bedroom and a family room. However, the family room can easily be converted into a third bedroom. Likewise, the third level contains a junior master suite and an en suite bedroom, with provision for an additional bedroom if needed. The attic level contains an en suite bedroom and a study, both of which open out to a roof terrace.
Being on an elevated site, the views are a selling point, Koh points out. The master suite, and junior master suite and bedroom on the third level are designed such that the owner gets to wake up to a view of Sembawang Park every morning, he says.
Lye reckons the house at 2A Andrews Avenue is likely to be purchased by an “industrialist” or entrepreneur whose business is located in the Gambas, Woodlands or Yishun area. “The profile of the buyers here — they tend to be those who already live in the northern region and are looking for a landed home in this area,” he says.
The 3½-storey house has a builtup area of 5,500 sq ft and sits on a land area of 2,882 sq ft. It obtained temporary occupation permit (TOP) just last month. The property has been assessed by valuation firm GB Global, which valued it at $4.6 million. The duo has therefore pegged the price of the house at 4.58 million ($1,588 psf).
An open house was conducted on the weekend after polling day, on Sept 12 and 13. “The response was very good,” says Lye. Around 20 people viewed the property over the weekend, with two offers received so far. However, they understand that in the current market, “people have a lot of choices”.
Price adjustments
Some developers in Sembawang have adjusted their prices in order to move sales, owing to the property cooling measures in place. Located nearby at Wak Hassan Place is Malaysian developer Sunway Group’s Avant Parc, comprising 15 terraced houses that were completed in March 2014. The 99-year leasehold houses have five levels (including the basement and attic), five bedrooms, a plunge pool or Jacuzzi as well as a small rear garden. Of the 15 houses, nine are intermediate terraces with land areas ranging from 1,615 to 1,970 sq ft and built-up areas from 4,128 to 5,638 sq ft. The remaining six are corner terraces ranging from 2,153 to 4,148 sq ft, with bigger built-up areas of 5,298 to 7,427 sq ft.
One of the corner terraced houses at Avant Parc, which was fitted out as the show suite and sits on a 3,671 sq ft plot, was sold for close to $3.3 million ($933 psf) in August last year. When the developer first previewed the project a year ago, the indicative selling prices were between $2.5 million and $3.9 million for the intermediate and corner terraces. The developer offered some units as “star buys”, and that had resulted in a number of units sold. According to caveats lodged, four intermediate terraced houses had been sold at prices ranging from $1.95 million ($1,204 psf) to $2.26 million ($1,148 psf) from April to August. Another corner terraced house sitting on a 4,133 sq ft parcel fetched $3.13 million ($757 psf) in July.
Fragrance Group has developed a row of eight detached houses fronting the beach at the Straits of Johor. Positioned as a collection of luxury beachfront houses and aptly called Bungalows by the Sea, the four-storey detached houses come with six en suite bedrooms, including a spacious master and junior master suite with direct views of the sea. The land area of each of the bungalow ranges from 4,532 to 5,468 sq ft, with a total floor area of 7,416 to 9,752 sq ft.
At the peak of the market in 2013, the first two detached houses at Bungalows by the Sea were sold for $7.18 million ($1,324 psf) and $6.4 million ($1,412 psf), according to caveats lodged in May and July 2013 respectively.
Prices of the houses at Bungalows by the Sea were adjusted last year, and two properties were sold for $5.7 million ($1,118 psf) and $5.65 million ($1,151 psf) in May and June respectively last year. Another detached house at Bungalows by the Sea that sits on a 5,468 sq ft plot was sold for $5.9 million ($1,078 psf) in December. The most recent transaction at Wak Hassan Drive was in January, when one of the detached houses fetched $5.6 million ($1,186 psf), according to URA Realis.
Second foray
The fledgling SRI5000 Developments hasn’t stopped at just one house. The duo has developed a pair of semi-detached houses on Berwick Drive within the established Serangoon Gardens Estate. The houses, which are 999-year leasehold, are scheduled for completion next January.
The new developers chose Serangoon Gardens as a second location for their landed housing project because it is a sought-after location by families, especially professionals in their 30s and 40s. They can either buy the house for their own use or rent it out to expatriate families, given that the area is popular with those who want to send their children to the Australian International School or Lycée Français de Singapour (French School of Singapore). Lye foresees the pair of semi-detached houses at Berwick Drive appealing to a younger set relative to the house at Andrews Avenue.
The house at 9A Berwick Drive has a built-up area of 4,200 sq ft and a land area of 2,478 sq ft, while that at 9B has a built-up area of 4,100 sq ft and a land area of 2,441 sq ft. The indicative price is said to be $4.38 million for 9A and $4.35 million for 9B. The pair of semi-detached houses is a redevelopment of a detached house that sat on Borthwick Drive. The duo purchased the detached house for $5 million last year, according to a caveat lodged then.
When it comes to technical issues such as property development and construction, Koh and Lye say they are used to such challenges, having worked with developers on their projects in the past. For example, the original entrance of the bungalow on Borthwick Drive was narrow, and the street itself was narrow. When they redeveloped the property, a decision was made to reorientate the new houses to face Berwick Drive instead. “The pair of semi-detached houses therefore enjoy wider frontage, a more regular shape and better layout, with brighter interiors, instead of having a house that is long, narrow and dark, which would have been the result had the original orientation been retained,” says Lye. “Berwick Drive, being a wider road, also means easier access to and out of the house.”
While hunting for redevelopment opportunities, the pair had even tried bidding for landed homes at property auctions last year. They bid for a single-storey bungalow sitting on an 8,666 sq ft freehold site on Brighton Crescent. It was an estate sale, and at the property auction conducted by Colliers International on Sept 24 last year, the opening price was $7.7 million. An opening bid of $8 million followed, and with several parties vying for the property, it was finally sold under the hammer for $9.1 million. Besides Koh and Lye, even Fragrance Group’s chairman and CEO James Koh was at the auction and bidding for the same property. The successful buyer, however, was neither one of the developers. It was said to be an existing resident in the Brighton Crescent neighbourhood who wanted to buy the house to redevelop it into a large home for the extended family, recounts Grace Ng, deputy managing director of Colliers.
Artist's impression of the pair of semi-detached houses at 9A/9B Berwick Drive
‘No confict of interest’
Being new to the property development game wasn’t easy in the beginning, admits Lye. Their lack of a track record meant they had trouble securing bank financing for the purchase of the house at 2A Andrews Avenue. “So, we paid cash for the land,” he recounts.
With their second development on Berwick Drive, banks were more willing to finance their project as they now had a track record. “And after seeing our finished product, we have the green light to go ahead with their full support,” says Lye.
The partners at SRI5000 have also received endorsement from SLP International in their property development undertaking. In fact, ZACD, a property investment firm founded by SLP’s principal, Stanley Yeo, has also taken a stake in the project on Berwick Drive in a joint venture with SRI5000 Developments.
Even with this new property development venture, Koh and Lye have no intentions of relinquishing their property agency business and becoming full-time property developers. Managing a property agency will continue to be their core business, says Koh. “We have grown SRI5000 from just 30 agents five years ago to more than 400 today,” he adds.
There is also no conflict of interest where developers are concerned, says Lye. “In fact, we are still working closely with a lot of developers,” he adds. “As we have built houses ourselves, they know that we understand the issues they face as developers.”
Like all realtors, Koh and Lye want to be recognised for the GCBs, Sentosa Cove bungalows and other luxury properties they have brokered — and not just for the last four digits of their mobile numbers and car number plates with their trademark “5000”, an SRI5000 tradition they started. “As developers, we want to do our part in modernising and beautifying the landed housing estates of Singapore — one house at a time,” says Koh. “It’s also in line with our goal of leaving a legacy.”
Interested to browse landed homes in Sembawang? Click here
This article appeared in the City & Country of Issue 695 (Sep 21, 2015) of The Edge Singapore.