Wee Hur: From residences to workers’ dorms and student housing
By Cecilia Chow
/ EdgeProp Singapore |
Goh: At this point, I don’t want to be too aggressive because the world right now is quite challenging. We have to be prudent (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - The 115-unit Bartley Vue, a private condominium located at Jalan Bunga Rampai, off Bartley Road, was originally scheduled to preview on the National Day weekend of Aug 7–9. In response to the return of Phase Two (Heightened Alert) restrictions, the preview has been shifted to Aug 21, in line with the postponement of the National Day Parade. Meanwhile, the development’s official launch will be scheduled for a fortnight later, on Sept 4. (See also: Wee Hur awarded $43 mil construction project at Dover Ave)
The developer of Bartley Vue is Singapore-listed construction company Wee Hur Holdings. It had emerged at the top of nine bids to win the 50,231 sq ft, 99-year leasehold site with a gross floor area of 105,487 sq ft back in January 2020. Its winning bid was $93.39 million ($885.32 psf per plot ratio or ppr). On the site, Wee Hur intends to develop two 16-storey blocks with a mix of two- to four-bedroom apartments. “The location is near the city, it’s 500m from Bartley MRT Station, near schools and other amenities,” says Goh Yeow Lian, executive chairman and managing director of Wee Hur Holdings.
The pricing of Bartley Vue is expected to take its cue from recent prices of city fringe or Rest of Central Region projects in its vicinity. A two-minute drive away is the Bidadari-Woodleigh area, where the 805-unit Park Colonial is fully sold as at end-May, at a median price of $1,916 psf (based on transactions from March to May 2021). The project was launched on July 5, 2018, on the eve of the last round of property cooling measures. Meanwhile, the 667-unit The Woodleigh Residences, an integrated development fronting the Bidadari Park, was launched in November 2019. It is 70.3% sold, with median price of $2,150 psf, based on caveats lodged in June and July to date.
Bartley Vue’s preview comes on the back of the launch of Pasir Ris 8 in the previous weekend. The 487-unit private condominium is part of an integrated development in the suburbs of Pasir Ris in the Outside Central Region. It sold 415 units (85%) at prices ranging from $1,400 psf to $2,000 psf, with average price of close to $1,600 psf. Indeed, $2,000 psf is a record price for the Pasir Ris area. (See: Discover insightful data of any Singapore condominium with our condo directory)
That had a ripple effect on other developers’ projects that weekend. A prime beneficiary was the 680-unit Sengkang Grand Residences, an integrated development located next to Buangkok MRT Station in Sengkang. Over the week of July 19–25, it sold 45 units at about $1,700 psf, with the majority sold over the weekend that Pasir Ris 8 was launched. The project is 78% sold to date. Another beneficiary was the freehold Parc Komo at Upper Changi Road North, which sold over six units last weekend at an average price of $1,576 psf. The 276-unit project is 59% sold to date.
The completion of the fully-sold 735-unit Parc Botannia is likely to be end this year (Photo: Wee Hur Holdings)
In fact, the volume of new home sales was 747 units in the week of July 19–25, three times that of the previous week’s 243 units, points out Alan Cheong, executive director of Savills. “This is highly unusual, especially in a Phase Two (Heightened Alert) state,” he says.
Desmond Sim, CEO of Edmund Tie, attributes the buying frenzy over the weekend partly to the bids received at land tenders that closed on July 22, where the private residential development site at Lentor Central achieved a high of $1,204 psf ppr; and the executive condo (EC) site at Tampines Street 62 hit $659 psf ppr. They followed on the heels of the land tenders that closed at the end of May, which saw a site at Ang Mo Kio Avenue 1 sold for $1,118 psf ppr, and an EC site at Tengah Garden Walk for $603 psf ppr, which were already record bids.
‘Asset bubble’
These are initial signs of “asset bubble” behaviour, according to DBS Group Research in a flash note on July 27. “With the government maintaining its hawkish stance on the property market, the MAS chief highlighting the potential of levying property gains tax in recent media comments, and many indications of bubbly behaviour (land prices hitting new records and new launches saw strong response and record prices), we read such strong sales momentum with caution given possible actions to cool the strong demand for property in a still fragile economic recovery in the ongoing Covid-19 outbreak,” say the analysts.
Amid this maelstrom, Wee Hur’s Goh intends to be selective in bidding for GLS sites. He acknowledges that residential property prices in Singapore, like major cities around the world, “have been holding up pretty well”. He adds: “At this point, I don’t want to be too aggressive because the market environment right now is quite challenging. We have to be prudent.”
Wee Hur will focus on the launch of Bartley Vue this year. It will be the company’s first new residential project after a lapse of four years. Its last project launch was in November 2017, namely Parc Botannia. The 735-unit project at Fernvale Street, off Sengkang West Way, is a joint-venture project with Singapore-listed property developer Sing Holdings.
Prior to Parc Botannia, Wee Hur’s last development was Parc Centros at Punggol Central, a joint venture project with ZACD Group which was launched in 2012 and completed in 2016 (Photo: Albert Chua/EdgeProp Singapore)
Prior to that, its last launch was in 2012, namely the 618-unit Parc Centros at Punggol Central, in a joint venture (JV) with ZACD Group. The project was fully sold and completed in 2016, with Wee Hur Construction as the contractor.
Parc Botannia has been fully sold as at March 31 this year, at an average price of $1,302 psf across the entire development. The completion of the project has been delayed to end-2021, due to Covid.
Wee Hur Construction handles the construction of the firm’s development projects, from Parc Centros to Parc Botannia, and will handle that of Bartley Vue too. There are benefits to being both the developer and builder of a project. “When we tie up with our construction arm, we are able to control the costs and work within the budget,” says Goh. “But with Covid, it’s harder to control construction costs.”
Like its parent company, Wee Hur Construction has been cautious in bidding for construction projects. Its latest construction project secured was the $176.7 million building contract at Bidadari, awarded by HDB on June 1.
The current split between public and private-sector contracts in its construction business is about 60:40. Goh expects the split to remain at this level for the near term.
Tuas View, where capacity has been reduced by 30% from 16,800 to 11,808 beds under the new guidelines and requirements after the outbreak last year (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Capacity slashed at workers’ dorms
Besides construction and property development, Wee Hur ventured into the purpose-built dormitories (PBD) for foreign workers in 2013. Its maiden PBD is Tuas View, which opened in 2014. With 16,800 beds, it was the first and largest PBD of its kind in Singapore. However, since the Covid outbreak across workers’ dormitories last year, new guidelines and requirements were introduced at workers’ dormitories. Tuas View’s capacity was reduced by 30% from 16,800 to 11,808 beds. Its current occupancy is 60% of the reduced capacity, according to Wee Hur in its FY2020 annual report.
The original 3+3 year lease on the land has been extended by another three years from November 2020. There was some capital expenditure involved in meeting the new requirements too. “In view of the additional capex, higher operating cost and lower occupancy rate from the reduced number of foreign workers as a result of Covid, it is quite a challenge to meet breakeven,” says Goh.
Wee Hur and its JV partner, workers’ dormitory operator TS Group, had won a second PBD, Pioneer Lodge, in September 2019. The original capacity was 10,500 beds. Construction work at Pioneer Lodge has been suspended since the start of last year’s “circuit breaker” on April 7, 2020. Under the new requirements for PBD, the capacity has been reduced by about a third to over 7,000 beds.
“It would not be a viable project based on the new requirements for workers’ dormitory under the original terms and conditions of the sub-tenancy agreement with BCA,” says Goh. “We are waiting for BCA to reply to our request for mutually agreed revised terms and conditions of the sub-tenancy agreement.”
Pioneer Lodge is supposed to be the first of the new-generation purpose-built workers’ dormitories. “Two years has passed on the original land lease of 3+3+3 years,” says Goh. Its depends on the proposed business model for the new generation of PBDs that the government will adopt, according to Goh. “As a business, there is demand for sure ,” he adds. “There are over 300,000 foreign workers in Singapore, and they all need a place to stay.”
With the border closures continuing, Wee Hur has put on hold the opening of its third PBSA, Y Suites on Waymouth in Adelaide (Photo: Wee Hur Holdings)
Ramping up student housing down under
A spin-off from the PBDs is Wee Hur’s purpose-built student accommodation (PBSA) in Australia. Its first foray in the PBSA sector was in 2015, when it developed a 1,578-bed PBSA at Buranda in Brisbane, which is still regarded as the largest single-phase PBSA facility in Australia.
Since then, the group has acquired seven other greenfield land parcels across five cities, including Adelaide, Melbourne and Sydney. They are currently at various stages of completion, and are expected to be fully operational by 2023. These seven projects, together with the PBSA at Buranda, Brisbane, with a total of 5,609 beds, have been injected into Wee Hur PBSA Master Trust.
An eighth PBSA development site at 104-116 Regent Street, Redfern, Sydney, with the potential to yield 400 beds, was acquired under a second trust, set up in January 2021, namely Wee Hur PBSA Fund II. Both Wee Hur PBSA Master Trust and Wee Hur PBSA Fund II are managed by Wee Hur’s wholly-owned fund management arm, Wee Hur Capital.
Last October, Wee Hur launched its own brand, Y Suites, and has partnered UniLodge, a student housing operator with the largest number of beds under management in Australia, to manage the properties on its behalf. The first property to be launched under Y Suites is the 811-room Y Suites Waymouth at 124 Waymouth Street in Adelaide.
Two other PBSA that were operating under the Unilodge name, the 1,578-bed Unilodge Park Central in Brisbane and the 772-room UniLodge City Gardens in Adelaide, have been rebranded Y Suites this year, with Unilodge continuing to manage them.
The fourth PBSA, Y Suites on A’Beckett in Melbourne is scheduled to be completed by end 2021, and ready for operation by the first semester 2022 (Photo: Wee Hur Holdings)
“Our PBSA business provides quality accommodation to tertiary students,” says Goh. “These facilities are strategically located within proximity to universities, public transportation nodes and amenities in the major capital cities.”
One of the key factors for entering the business was that Australia’s PBSA business was still at its infancy back in 2015. While the UK is the most mature market with a penetration rate of 28% (28 beds for every 100 students), followed by 14% in the US, Australia’s rate was only 6%. Goh saw the chance to enter the sector to generate stable recurring income and capital appreciation for Wee Hur.
Hence, the first property in Brisbane, with 1,578 beds, was over 90% occupied in 2019 as the property is located next to a transportation node. Even though its occupancy has come off due to Covid and the border closings, Goh remains optimistic about the business.
The occupancy rates for UniLodge Park Central at Brisbane and UniLodge City Gardens at Adelaide were likewise affected by border closures last year. When annualised, occupancy rates were 57% and 52% respectively. Goh is expecting occupancy rates to decline further as borders remain closed this year.
With the border closures continuing, Wee Hur has put on hold the opening of its third PBSA, Y Suites on Waymouth in Adelaide. The fourth PBSA, Y Suites on A’Beckett in Melbourne, is scheduled to be completed by the end 2021, and ready for operation by the first semester of 2022. Construction work has continued, despite several rounds of lockdowns, constraint on manpower on site and safe management measures, says Goh.
Development Approval has also been obtained for its PBSA at Gibbons Street in Sydney (Photo: Wee Hur Holdings)
Development approval has been obtained for its PBSA at Gibbons Street, Sydney, and at Moore Street, Canberra. Contractors for both PBSAs have been appointed, with construction works expected to be completed by the end of 2022, and ready for operation for Semester 1, 2023.
Including the eighth PBSA at Regent Street, Sydney, Wee Hur says its portfolio will increase to 6,021 beds. “The occupancy rates for our operational PBSAs will improve substantially once the borders are opened as our PBSAs house mostly international students, which make up 83% of our occupants,” says Goh.
Wee Hur has a development project in Australia too, a second plot at Buranda, Park Central, Brisbane. The group will be submitting its Development Plan by end-2021, for a mixed-use project with residential, PBSA, retail and commercial space.
Goh sees the PBSA business in Australia as “a resilient and defensive asset class”, and intends to extend Wee Hur’s footprint in that sector.
Check out the latest listings near Bartley Vue, Park Colonial, Sengkang Grand Residences, The Woodleigh Residences, Pasir Ris 8, Parc Botannia, Parc Centros, Tuas View, Bartley MRT Station, Buangkok MRT Station
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