Thye Hong family’s 101,550 sq ft GCB site creates buzz in market

The pricing for the 101,550 sq ft freehold site in Garlick Avenue is said to be around S$90m. 

The Business Times4 Sep 2020

AN old bungalow on a freehold site of 101,550 sq ft in the Garlick Avenue Good Class Bungalow (GCB) Area owned by some members of the Lee family behind the Thye Hong group that used to make biscuits has been generating some market buzz in the past few weeks.

Talk on the grapevine is that several potential buyers have expressed interest in this large plot, which may be subdivided for redevelopment into five or six bungalows.

The pricing is said to be around S$90 million. After factoring in the provision of roads and an electrical substation, the net land area would be smaller, at about 81,240 sq ft.

Based on the minimum plot size of 1,400 square metres or about 15,070 sq ft stipulated as a planning norm for any newly-created bungalows within Singapore’s 39 GCB Areas, the Garlick Avenue property would yield five bungalows.

It would cost between S$8 million and S$10 million to build each bungalow (with a built-up area of 12,000-15,000 sq ft) including finishes and the cost of fitting out bathrooms and kitchens with upmarket brands, a seasoned bungalow developer told BT. This would result in a breakeven cost of S$S26-28 million per home. A brand-new bungalow of this size in the locale would fetch S$30-32 million today, he estimates.

Alternatively, the site may be carved into six bungalow plots instead of five, by not building a new road and instead having long driveways for each house. However, this would eat into the usable land area of each bungalow, make it less attractive and hence lowering the selling price, added the developer.

Realstar Premier founder William Wong said the District 10 property may also appeal to an end-user buyer who is looking for a large site to build a mansion to call their own. “That said, for this price quantum, a potential buyer may opt for a more choice GCB location such as Nassim Road or the Cluny locale.”

The Garlick Avenue property is owned by Thye Hong Manufacturing, which in turn is ultimately owned by an entity whose shareholders are listed as Lee Boon Leong and his sisters Lee Tuan and Lee Wah, according to a Handshakes search.

Mr Lee passed away earlier this year. The trio are children of Lee Gee Chong, who was the chairman of the Thye Hong Biscuit Factory. In 1960, he was kidnapped from his car as he was nearing his home in Garlick Avenue, and later murdered.

Mr Lee Gee Chong’s father, Lee Choon Seng, set up many businesses including Thye Hong Biscuit Factory.

(There was also a kidnap attempt on Mr Lee Boon Leong in 1965 but he survived and kept a low profile.)

Market watchers say the GCB market has been more active in the past couple of months, after slowing down during the “circuit breaker” or partial lockdown when property viewings were disallowed from April 7 to June 18. Lewis Cha, executive director at List Sotheby’s International Realty (ListSIR), said: “As a GCB is a big-ticket purchase, most buyers would prefer to confirm the purchase after looking at the physical property as there could be building constraints which are not visible on plans.

“Moreover, the site orientation or blocked views could only be discovered on-site.”

With the resumption of property viewings since June 19, the GCB market has begun to thaw. Realstar’s Mr Wong said: “Some Singaporean high net worth individuals may find that it is not so viable to park their funds in equities and bond markets. In comparison, the property market is looking attractive especially in the low interest rate environment.”

Earlier this week, BRC Asia said it plans to sell a bungalow under development on a plot of about 13,293 sq ft site at 32G Nassim Road for S$38.38 million. The property is expected to obtain Temporary Occupation Permit by year’s end.

Bungalows in GCB Areas are the most prestigious form of landed housing in Singapore

ListSIR’s analysis of caveats data in URA Realis downloaded on Sept 2, 2020 shows that up to Aug 19, there were 21 transactions in GCB Areas totalling S$415.8 million. This is lower than the 25 deals which amounted to S$466.8 million in the same period of last year.

Based on caveats information, the latest transactions include an old bungalow in Gallop Park which fetched S$35 million or S$1,273 per square foot on the land area of 27,491 sq ft. While the property is a stone’s throw from the Singapore Botanic Gardens, it has a small road frontage.

Another caveated transaction, in the early stages, is of a property in Chatsworth Road which is being sold for S$28 million or S$1,867 psf on land area of almost 15,000 sq ft. The buyer is understood to be Lyn Chan, wife of Dymon Asia Capital co-founder Danny Yong. On site is an old two-storey old house that is ripe for redevelopment.

Also expected to be torn down and rebuilt is an old bungalow in Bukit Sedap Road, off Holland Road, that went for S$18 million or S$1,156 psf on land area of about 15,565 sq ft.

Besides the level of activity in the GCB market that can be seen from caveats, there have been a string of deals recently that are not reflected in the URA Realis caveats database. These include a house in Margoliouth Road being sold for about S$28.4 million according to market chatter. The house on the 17,539 sq ft site is in move-in condition.

Along Old Holland Road, a bungalow is in the early stages of being sold for S$21 million; on the 17,404 sq ft site is a bungalow which is in good condition.

Also not visible in caveats data is an old bungalow along Fernhill Road near the Botanic Gardens that is in the early stages of being sold for close to S$30 million. The 15,602 sq ft plot is expected to be redeveloped.

In Mount Echo Park, a bungalow is transacting for about S$27 million.

In some instances, buyers do not lodge caveats until much later, as they have entered into deals with long option exercise and/or completion periods.

This may be due to the buyer being a developer who needs a longer runway to plan and work with the architect on the bungalow’s design

Some GCB buyers ask sellers for a longer option exercise period and/or completion period as they need to find a buyer for their existing property or to have it transferred to a family member, to avoid paying 12 per cent Additional Buyer’s Stamp Duty (for a Singaporean’s second property).