[UPDATE] Tiong Seng-Ocean Sky joint venture previews Cairnhill 16 at prices from $2,789 psf
By Cecilia Chow
/ EdgeProp Singapore |
Edward Ang, executive chairman of Ocean Sky International (left) and Pek Zhi Kai, executive director of Tiong Seng Holdings at the showflat of Cairnhill 16 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - Sitting at the top of Cairnhill Rise and located next to Cairnhill Arts Centre is the upcoming high-end condo Cairnhill 16. Construction has begun on the 15,407.6 sq ft freehold site where the new 15-storey block with 39 condominium units is targeted for completion by March 2023.
Cairnhill 16 is a redevelopment of the former Cairnhill Heights, which listed construction and civil engineering firms turned property developers Tiong Seng Holdings and Ocean Sky International purchased en bloc for $72 million in April 2018.
Tiong Seng and Ocean Sky formed a 60:40 joint venture company TSky Development in March 2017. It is a platform to undertake property development, investment and other property-related activities together, says Edward Ang, executive chairman of Ocean Sky. “TSky Development will be the anchor developer of the projects,” he adds.
For instance, Cairnhill 16 is developed by joint venture company TSky Cairnhill where TSky Development holds a 51% stake; Ocean City Global Limited, a subsidiary of Hong Kong-listed Sino-Ocean Group (30% stake), Seacare Property Development (10%) and Min Ghee Investment (2018) with a 9% stake.
Scale model of the 39-unit Cairnhill 16, which had drawn interest from buyers exploring a bulk purchase of the entire block (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Set to preview on Nov 13, the project will be scheduled for launch a fortnight later on Nov 27. “This is a good time to launch,” says Pek Zhi Kai, executive director of Tiong Seng Group. “December is usually a holiday month when people travel, especially with expanded vaccinated travel lanes (VTLs). So we thought it was better to launch in November.” (Browse newly launched condos in Singapore right now)
The 30-year-old Pek has been executive director of Tiong Seng Holdings since July 1. Pek joined Tiong Seng Group in 2018 as manager (commercial) of steel construction company Steeltech Industries (formerly known as Tiong Seng Equipments), followed by a stint as manager of Tiong Seng Chang De, the group’s wholly-owned property development subsidiary, in 2019.
Incidentally, Pek is the son of former CEO and executive director of Tiong Seng Holdings, Pek Lian Guan. “The baton has been passed to Zhi Kai and he’s running this leg [of the race],” says Ang of Ocean Sky International. “We work well together, and his millennial mindset will provide a good balance as most of the homebuyers these days are in his age group,” he adds.
‘Double down’
According to Pek, this is his fourth year with Tiong Seng Group. “I got more involved with the team [at TSky Development] since the circuit breaker last year because it was a tough time. Edward and I had to double down because for a project to be successful, you need ownership. That’s why we have to be more involved.”
Showflat of a 1,292 sq ft, three bedroom plus study with private lift access designed by The I.D. Dept (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The launch was held back for more than a year due to the Covid pandemic and the different phases of restrictions with the heightened alerts, says Pek. “We went forward and then back because of the tightening measures. We wanted to wait it out until Singapore has fully recovered and reopened, but we didn’t want to wait another year. Now that there’s a gradual reopening of the economy, we thought we should go ahead with the launch.”
A new team has been put in place, with Kelly Ang as TSky Development’s head of marketing and sales. Ang was previously the marketing and sales manager at Singapore-listed property group Oxley Holdings for more than four years. Before that, she was with listed property giant City Developments (CDL). Janice Tan, previously CDL assistant manager, has now joined TSky Development as manager of sales & marketing. A new general manager has been installed at TSky Development: Vincent Chew, who was previously director of projects & business development at Evia Real Estate.
Before that, Chia Boon Kuah, an independent director of Ocean Sky International since 2017, also assumed the role of executive director at TSky Development from late 2019. Chia was previously group president and CEO of GuocoLand and prior to that, COO of property sales at Far East Organization. He has relinquished his executive director role at TSky Development but remains on Ocean Sky International’s board as an independent director.
“Even though we still draw on our own experience, we wanted to bring in a new team that has the energy to refresh the project,” says Pek.
The kitchen is fully fitted with V-zug kitchen appliances (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Pek was not involved in the acquisition of the Cairnhill 16 site back in 2018, but he is familiar with the location. “I studied at Anglo-Chinese School (Junior),” he says. At that time, Anglo-Chinese School (Junior) or ACS Junior, was located at 136 Cairnhill Road, which is now home to the Ministry of Education Language Centre (Newton). This was before its move to Winstedt Road.
“This part of Cairnhill has always been a nice, quiet area; and is sought after by foreigners as it’s close to Orchard Road shopping area, Mount Elizabeth Hospital and Paragon Medical Centre,” adds Pek. Singaporeans find it a desirable location too, for many of the same reasons, plus the fact that it is within 1km of schools such as ACS Junior and St Margaret’s Primary School, he reckons.
‘Digestible price point’
Cairnhill 16 is the second joint venture project by TSky Development. The first was the redevelopment of the former Sloane Court Hotel, which was purchased for $80.5 million in August 2017. TSky Development has a 70% stake in the development company TSky Balmoral, with Progen Holdings taking a 20% stake and Seacare Property Development, the balance 10% in the joint venture.
Construction is well underway at the 38,943 sq ft freehold site, with the 52-unit, 12-storey Sloane Residences expected to be completed by next March. To date, 17 units have been sold at an average price of $2,871 psf, according to caveats lodged, bringing the sales rate to 32.7%.
Master bedroom with en suite bathroom and balcony (Photo: Samuel Isaac Chua/EdgeProp Singapore)
“The sales rate for Sloane Residences has been a lot healthier over the past month,” notes Pek. Many of the locals are buying because of its proximity to schools such as ACS Junior and ACS Barker Road, he adds.
According to Ang, there’s an international mix of buyers at Sloane Residences. There are about five different nationalities among the 17 buyers, including Americans, Indonesians and Singaporeans, he says.
Across the road from Sloane Residences is the 117-unit, freehold The Hyde by Aurum Land, where 45 units have been sold to date. Last month, a 947 sq ft, two-bedroom apartment was sold for $3.15 million or a high of $3,315 psf. In fact, since February, 13 units have been sold at prices from $3,000 psf.
“It’s a sign that buyers are beginning to accept these price points,” says Pek. “So we are confident of launching Cairnhill 16 at a very digestible price point.”
One of the two common bedrooms with shared bathroom (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Cairnhill 16 will have prices starting from $2.216 million ($2,859 psf) for a 775 sq ft, two-bedroom unit; from $2.983 million ($2,827 psf) for a 1,055 sq ft, three-bedroom unit; from $3.6 million ($2,789 psf) for a 1,292 sq ft, three-bedroom-plus-study; and from $5.74 million ($3,291 psf) for a 1,744 sq ft, four-bedroom unit.
‘Upside potential’
“With prices of a freehold, prime condo in the Cairnhill area from $2,789 psf, there’s tremendous upside for buyers,” says Pek. (Discover insightful data of any Singapore condominium with our condo directory)
Ang agrees. “We are pricing the project very attractively,” he says. “Cairnhill 16 is a boutique development in a very quiet area.” It’s an enclave that has traditionally been attractive to foreigners, especially Indonesians, he adds.
Nearby, another listed construction group, Low Keng Huat launched its luxury project, the 138-unit Klimt Cairnhill (redevelopment of Cairnhill Mansions) at prices starting from $3,532 psf towards the end of August. Based on a caveat lodged, a 1.496 sq ft, three-bedroom unit was sold for $5.7 million ($3,818 psf).
Master bathroom with full marble tiles and Grohe bathroom fittings (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Of the 39 units at Cairnhill 16, 13 are two-bedroom units of 775 sq ft, with another 13 three-bedroom units of 1,055 sq ft. A three-bedroom-plus-study of 1,292 sq ft accounts for nine units, with four-bedroom units of 1,744 sq ft making up the remaining four units. All units will come with private lift access.
Attention has been placed on the design and layout of units too. Units come with a 3.2m ceiling height. The living and dining area comes with marble flooring of larger than average 120cm by 60cm slabs. Kitchens are fully fitted with Swiss brand V-Zug kitchen appliances, such as a four-door fridge integrated with the kitchen cabinetry, stove provided with City Gas piped town gas, and a dishwasher for the three-bedroom-plus-study and four-bedroom units.
The units with a study area are now sought-after by home buyers because of the shift towards work from home due to Covid. Owners can add a glass door to create a private room for conference calls and phone calls. “These days, privacy within one’s home is so important,” observes Pek.
Construction costs locked-in
The construction of Cairnhill 16 is handled by a joint venture between the construction arm of Tiong Seng Holdings and Ang Tong Seng, the construction arm of Ocean Sky International. Tiong Seng is handling the construction of Sloane Residences. “We have managed to lock in the construction cost with Tiong Seng,” says Ang. “It’s good that we are doing the construction because, in a time like this, there’s a lot of uncertainty in the construction timeline.”
The study area, where the partition wall can be removed to create a bigger living area or enclosed to be converted into a private study or home office (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Ang points to other projects where construction costs have shot up 20% to 30% compared to pre-Covid.
Indeed, for new tenders, construction costs are now 50% higher, notes Pek. “This is the trend that we are seeing: high material costs sustained due to disruption in global supply chain. We will continue to see difficulties in getting foreign labour and for projects to get started. With all these factors, construction costs are unlikely to come down within the next 18 to 24 months.”
Land prices have been inflated too, given the recent bids at government land sales (GLS) and prices achieved at collective sales, adds Ang. “If you factor all these things, it’s not going to be easy to find a new freehold development in the Cairnhill area, priced at $3,000 psf and below in the future.”
Dominic Lee, PropNex head of luxury team, agrees. “The quality of the materials used at Cairnhill 16 is high,” he says. “Pricing the project from $2,789 psf is definitely an attractive starting price.”
Second common bedroom (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Given the unit sizes at Cairnhill 16, which are relatively compact, Ken Low, managing partner of SRI, sees the development being palatable to Singaporeans who want a foothold in the prime address.
“The palatable quantum makes entry into the luxury market more accessible and will appeal to singles and small families,” says Lee Sze Teck, senior director of research at Huttons Asia. “A boutique luxury development gives owners a sense of exclusivity. On the flip side, facilities may be selective but that is not an issue as the owners may have club memberships.”
‘Legacy planning’
Before the launch, there had been interest from parties exploring an en bloc purchase. “The potential buyers we encountered were family offices and high net worth individuals who wanted to create a portfolio for their children,” says Pek. “They were mainly foreigners.” For instance, there was a family from Indonesia who considered buying for their children to occupy the top floor units, and then renting out the remaining units in the block. (See potential condos with en bloc calculator)
“We are willing to sell,” says Pek. And the purchase price for a block purchase is “about $140 million”, excluding additional buyer’s stamp duty (ABSD). “Previously, people thought $140 million was quite expensive, but in hindsight, it is attractive,” he adds. “But of course, we are now going to launch the project, and if there are more people who are interested in buying units, it will be harder for a potential buyer to buy the entire block.”
Ismail Gafoor, CEO of PropNex Realty, sees more investors exploring purchases with legacy planning in mind. “They would prefer a freehold development in their property portfolio,” he says. “Cairnhill 16 enjoys the benefit of being a freehold property and also situated within a great location in the Core Central Region, making it a worthwhile investment for any investor to consider.”
Against this backdrop of wealth creation, “local and foreign buyers alike have been picking up choice properties in the CCR as they find value in current prices,” says Doris Ong, deputy CEO of ERA Realty Network. “Coupled with the aspirations to own a luxury property, this has driven up demand for prime CCR homes.”
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