Roxy-Pacific to debut Mori, with entry price from $1,680 psf

/ EdgeProp Singapore |
Scale model of the 137-unit Mori at Guillemard Road (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - Executive chairman of Singapore-listed property group Roxy-Pacific Holdings, Teo Hong Lim, grew up in the Geylang area in the 70s. His father, Teo Kok Leong, who founded the company, had been a property developer since 1958. At one point, the elder Teo operated his business from the first level of a three-storey building at Lorong 12 Geylang, while his family resided upstairs.
“Even though I grew up in the Geylang/Guillemard area, I never developed anything in the area until Arena Residences,” says Teo.
Teo: In our design process, we put a lot of thought into the functionality and practicality of the layout of our apartment interiors (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Located off Guillemard Road, Arena Residences is a redevelopment of four residential sites on Guillemard Lane that Roxy-Pacific had purchased and amalgamated. The sites are located adjacent to Chen Li Presbyterian Church, which has been at Guillemard Road for over 90 years. The church has a kindergarten too, which Teo had attended as a child. Hence, his acquisition was partly due to nostalgia, he adds.
The first two sites at 12 and 14 Guillemard Lane were purchased for $22.5 million in September 2017, followed by the other two sites at 2 and 6 Guillemard Lane for $33.5 million in October 2017. The result is a freehold, 25,601 sq ft site, where construction of the new 14-storey Arena Residences is underway and scheduled for completion in 3Q2022.
The 98-unit Arena Residences was launched in November 2018 and is fully sold to date. Between April 2018 to October 2019, Roxy-Pacific had launched 10 residential projects in Singapore with a total of 849 units. Six of the 10 projects are fully sold to date, bringing total sales to 766 units and achieving a sales rate of 90% across the board.
Artist's impression of the 98-unit Arena Residences - EDGEPROP SINGAPORE
Artist's impression of the 98-unit Arena Residences (Credit: Roxy-Pacific)

Guillemard area transformed

Last November, Roxy-Pacific snapped up 15 terraced houses along Guillemard Road and Jalan Molek for $93 million when inventory ran low. It marked the largest private residential transaction in 2020 and boosted sentiments that developers were still hunting for development sites. For Teo, it was a milestone too: It was his second purchase of a site in the Guillemard area.
The new project at Guillemard Road-Jalan Molek is the 137-unit Mori, with a Japanese-inspired aesthetic and two residential blocks — one with five storeys and the other with eight. Given the level of competition from new residential projects that have sprung up in the neighbourhood in recent years, Roxy-Pacific put a lot of attention into the design of Mori, the layout of the units and the provisions within.
Unit sizes are bigger than the average in Roxy-Pacific’s existing residential portfolio, says Teo. At Mori, one-bedroom units start from 484 sq ft, with two-bedders from 710 sq ft and three-bedroom units upwards of 958 sq ft. There are only two four-bedders in the development, with each at 1,259 sq ft in size. Provisions within the apartments include additional storage spaces, a pullout kitchen tabletop, an additional vanity mirror in the master bathroom, and European brand fittings such as Gessi faucets and Roca sanitaryware for the bathrooms, and Bosch kitchen appliances, Blanco kitchen sink and mixer and De Dietrich washer-dryer.
“In our design process, we put a lot of thought into the functionality and practicality of the layout of our apartment interiors,” says Teo.
One- and two-bedroom units will feature a light colour scheme while three- and four-bedroom units will come with a dark colour scheme. “Although it’s a different colour scheme, the same philosophy flows through in terms of the details and provisions,” Teo adds.
Scale model of the 137-unit Mori - EDGEPROP SINGAPORE
Scale model of the 137-unit Mori, which has two blocks, one with five storeys and the other with eight (Photo: Samuel Isaac Chua/EdgeProp Singapoire)

Lure of freehold, city fringe offering

The entry price at Mori starts from $1,680 psf, with the average price likely to be in the $1,900 psf range.
“The prices are attractive, as freehold properties tend to command a 20% premium over leasehold properties in the same area,” says Ismail Gafoor, CEO of PropNex. “A 20% deduction from the premium would mean about $1,520 psf average for a 99-year leasehold property in the city fringe. Based on the bids at the Northumberland Road, Ang Mo Kio Avenue 1 and Lentor Central government land sales, the new 99-year leasehold projects that will be launched next year, will be selling at about $1,900 psf.”
The fact that Mori is a freehold property means it can be part of the homebuyers’ legacy, adds Gafoor. “The freehold tenure and city fringe location near the East draws a good number of people who believe that the value of the property will be preserved over the long-term.” With the HDB resale market still brisk, and suburban private condo launches slowing, Gafoor anticipates strong buying interest at Mori. (Discover insightful data of any Singapore condominium with our condo directory)
“The Guillemard area is considered to be in a prime city fringe location, a short drive from the CBD and the Paya Lebar commercial hub,” says Lee Sze Teck, senior director of research at Huttons Asia. Lifestyle amenities in the area range from food centres and markets to sports facilities such as the Badminton Hall in Geylang and Singapore Sports Hub. These provide convenience to both homeowners and tenants, he notes.
Lee sees Mori attracting more than just the usual buyer profile, namely investors or singles. “The availability of good-sized three- and four-bedroom units may draw families as well,” he says.
The project is a 10-minute drive to Suntec City and Marina Bay, and within walking distance of three MRT stations — Aljunied, Dakota and Mountbatten. For families with children of school-going age, Mori is located within 1km of Kong Hwa School and Geylang Methodist School (Primary and Secondary).
The Guillemard area - EDGEPROP SINGAPORE
The Guillemard area, where Roxy-Pacific purchased 15 terraced houses at Guillemard Lane and Jalan Molek and is redeveloping the site into the upcoming 137-unit Mori (Photo: Cushman & Wakefield)

Next Tiong Bahru?

Amenities in the Guillemard area include the Old Airport Road Food Centre, the former Singapore Badminton Hall which is now Guillemard Village, Tanjong Rhu Pau & Confectionery, as well as cafes such as Brawn & Brains Coffee and Grapevine @ Guillemard. “The Guillemard area is being gentrified,” says Roxy-Pacific’s Teo. “It’s on the fringe of Geylang, where you have a mix of hipster cafes and traditional eateries. Directly opposite are the HDB blocks in the Dakota area.” (Find HDB flats for rent or sale with our Singapore HDB directory)
The Guillemard area has its own flavour, PropNex’s Gafoor agrees. “It’s well connected via three MRT stations, and it’s near the Katong and Joo Chiat area as well as Suntec City, Marina Bay and CBD via the Nicoll Highway, East Coast Park Expressway and the Kallang-Paya Lebar Expressway,” he adds.
Mori is adjacent to Rezi 24, a freehold, 110-unit unit condominium developed by a joint venture made up of KSH Holdings, Heeton Holdings and SLB Development. Launched in 2019, the project is almost fully taken up, with 109 out of 110 units sold at the end of October.
A few doors away is the 50-unit Noma by Macly Group, that was launched in August last year, and is fully sold today. Another nearby boutique development 33 Residences, also by Macly Group, will be completed this year. The 275-unit Guillemard Edge nearby, which was completed in 2017, is also by private property developer Macly Group.
Doris Ong, deputy CEO of ERA Realty sees Mori’s debut contributing to the rejuvenation of the neighbourhood. “The whole streetscape is changing, with these new condominium projects mushrooming in the area and F&B outlets that are attracting the young,” she says. “It could be the next Tiong Bahru.”
Nicholas Mak, head of research at ERA Realty, sees Singaporeans making up the majority of the buyers. Based on ERA Research, Singapore citizens made up 83.2% of total residential property buyers in 3Q2021, up from 79.5% in 1Q2019. “That’s a 5% increase,” he notes. “In this climate, homebuyers are still predominantly Singaporeans — both in the new launch and resale market.”
Showflat of a 710 sq ft, two-bedroom unit at Mori (Photo: Samuel Isaac Chua/EdgeProp Singapore)

In the pipeline

Following the launch of Mori, Roxy-Pacific has one other project to be launched sometime next year. It is a new boutique condominium located at Institution Hill off River Valley Road. Roxy-Pacific is part of a joint venture that acquired the two 999-year leasehold residential plots at 10A and 10B Institution Hill for $33.6 million in February this year.
The joint venture for the purchase of the sites at Institution Hill is led by privately held property developer Macly Group, which holds a 48% stake, with Roxy-Pacific taking up 42% and LWH Holdings (formerly Lim Wen Heng Construction) with 10%. When combined, the sites have a total land area of 14,399 sq ft, with a maximum floor area of 40,040 sq ft. It will be redeveloped into a new residential development with 60 units.
Roxy-Pacific will continue to look for suitable development sites. “But I find land prices now quite mind-boggling,” Teo concedes. “Land cost is higher, construction cost is certainly higher and will continue to be so.” Hence, the property group will remain “cautious for now”, he adds.
Showflat of a three-bedroom-plus-guest at Mori - EDGEPROP SINGAPORE
Showflat of a three-bedroom-plus-guest at Mori (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Privatisation underway

Teo is seeking to privatise Roxy-Pacific, which was listed on the Singapore Exchange in March 2008. “We started thinking about privatisation earlier this year,” he says.
On Sept 20, Roxy-Pacific announced that TKL & Family has made a pre-conditional voluntary general offer for all the issued ordinary shares in the company. TKL & Family is a consortium made up of 11 individuals, including Teo and members of his family. .
The offer price of 48.5 cents is a 33.4% discount to the company’s net asset value of 72.87 cents as of the end of June. This takes into account the fair value of Grand Mercure Roxy Hotel and the group’s head office at Roxy Square in Singapore, Noku Kyoto and Noku Osaka in Japan, Noku Maldives and a hotel under development in Phuket, which were valued at $679.6 million as at June 30.
As at September 20, TKL & Family had secured irrevocable undertaking of 76.44% of Roxy-Pacific’s shares, including from Kian Lam Investment, which holds 40.01% and Sen Lee Development, which owns 11.22%, according to the company.
“We want to give shareholders the opportunity to monetise their shares,” says Teo. “And we are also reviewing our strategy because of the uncertainty regarding construction and the hospitality business brought about by Covid.” To date, Teo is the third-largest shareholder with 11.85% of the shares, and he holds the biggest stake (32.5%) in TKL & Family.
Teo and his brother, Chris Teo, deputy CEO and executive director of Roxy-Pacific, have been acquiring Roxy-Pacific’s shares in the open market. As at Nov 5, Teo holds more than 20% of the issued share capital of Kian Lam Investment, which in turn has more than 50% interest in the issued capital of Sen Lee Development, according to the company in its announcement on Nov 5. The offeror needs 90% acceptance for Roxy-Pacific to be delisted.
Roxy-Pacific is not the only property firm to seek a delisting this year. On Nov 10, an investment company owned by billionaire Gordon Tang and his wife Celine Tang, have made a privatisation offer for the listed property firm, SingHaiyi Group. The Tangs are the biggest shareholders of SingHaiyi, and Celine is the firm’s group managing director. In July, James Koh, founder and executive chairman of property development and hotel investment firm, Fragrance Group privatised the listed entity via a voluntary general offer through his private vehicle, JK Global Treasures.
10A and 10B Institution Hill - EDGEPROP SINGAPORE
Roxy-Pacific is part of a joint venture that acquired the two 999-year leasehold residential plots at 10A and 10B Institution Hill for $33.6 million in February this year. The site will be redeveloped into a new 60-unit project (Photo: Cushman & Wakefield)

Property developments boost topline

Roxy-Pacific’s forte has been in residential property development. In fact, its property development business saw a 27.4% y-o-y jump in revenue to $126.5 million, contributing to 89.6% of its total revenue of $141.2 million in 1HFY2021. “We believe that with residential prices holding up, along with Roxy-Pacific’s un-booked contracted sales, the top line will be firm for the group,” says Tracy Lim, analyst at corporate finance firm SAC Capital, in a non-rated report on Sep 22.
Besides property developments and hotels, Roxy-Pacific owns commercial investment properties such as 49 strata shop units at Roxy-Square in Singapore, a six-storey commercial building on Fanshawe Street in Auckland, New Zealand, as well as a 40% stake in two office buildings in Melbourne (312 St Kilda Road and 350 Queen Street) and one office building in Parramatta, Sydney, Australia. The occupancy rate at the two office buildings in Melbourne are at 85% and 86% respectively, while the property in Sydney is 67% occupied as at end June. “It’s still relatively stable because of the long tenancies,” notes Teo. “However, we are watching closely to see how the work-from-home and hybrid work trend will affect office tenancies over the longer term.” (Find Singapore commercial properties with our commercial directory)
With Mori and the upcoming development at Institution Hill in the pipeline for launch, Roxy-Pacific’s Teo says, “I guess we are quite fortunate we were able to buy two sites — one at the end of last year, and the other at the start of the year.”
The developer is also focusing on completing its residential projects that have been launched and fully sold, but where construction had been derailed by Covid. Its 57-unit Harbour View Gardens project has just been completed, and in the coming months, it plans to complete the 34-unit Bukit 828 and 56-unit 120 Grange.
Meanwhile, Mori will preview on Nov 20, with its launch scheduled for Dec 4.

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