UOL stays nimble

A year before the collective sale fever started raging, UOL Group and United Industrial Corp (UIC) quiet- ly picked up Raintree Gardens, a privatised HUDC estate, for $334.2 million, or $797 psf per plot ratio (ppr). Then, in a private treaty in January 2017, they purchased 45 Amber Road, a 70,000 sq ft free- hold site for $156 million ($1,063 psf ppr), from developer Sin Lai Huat.
“Fortunately, we bought these two pieces of land at relatively rea- sonable prices before intense com- petition drove land prices up,” says Liam Wee Sin, deputy group CEO of UOL Group.
UOL and Kheng Leong purchased Nanak Mansions for $201.1 million ($1,429 psf ppr) in September; it will be redeveloped into a 68-unit high-end condo (Photo credit: JLL)
At end-September, UOL Group purchased Nanak Mansions en bloc for $201.1 million ($1,429 psf ppr) in a joint venture with sister company Kheng Leong Co, the privately held property vehicle of the family of Wee Cho Yaw, former UOB chairman.
Prices of subsequent collective sale sites in the prime District 15 neighbourhoods of Amber Road and Meyer Road have since risen. In early October, Amber Park was sold for $906.7 million ($1,515 psf ppr), followed by the $146.99 million ($1,536 psf ppr) sale of Parkway Mansion in mid-December.
‘Disconnect’ between prices of land and private homes
“Each new en bloc sale or government land sale seems to have set the benchmark for the next tender, fuelling the escalating land prices,” says Liam. He sees a “disconnect” between the prices of land and the end-product — private homes.
According to URA data, private-home prices showed an uptick of 0.7% in 3Q2017 after 15 consecutive quarters of price declines. Based on transacted prices of en bloc sites sold in prime District 15 alone, free- hold land prices have soared 44.5% in terms of psf ppr over the last 12 months. Thus, Liam says, “we will be more selective in bidding for sites with good attributes and where ask- ing prices are reasonable”.
UOL has been buying en bloc sites over the past 20 years, starting with the one for Novena Suites in 1997, followed by the one for The Sunshine on Upper Serangoon Road and 1 Moulmein Rise in 1999. The latest acquisition was...