Room for growth in private home sales if foreign buyers return: CDL

An artist’s impression of Irwell Hill Residences, a District 9 project near Orchard MRT station and the future Great World MRT station.PHOTO: CITY DEVELOPMENTS LIMITED

Updated from : The Straits Times, 26 Mar 2021

While Housing Board upgraders have helped keep new private home sales buoyant, the possible return of foreign buyers amid vaccine roll-outs and more open borders could fire up the market, a City Developments (CDL) official said on Thursday (March 25).

Group general manager Chia Ngiang Hong told a briefing that developers had sold about 23,000 units during the 2013 to 2014 peak, while 9,982 units were transacted last year and 9,912 in 2019.

“So there’s still room for growth,” he said. “With the vaccination going quite smoothly and many countries trying to develop reciprocal (travel) arrangements, we hope more foreigners and investors will come in.”

Mr Chia’s remarks came ahead of Saturday’s preview of the 540-unit leasehold Irwell Hill Residences, a District 9 project conceived after the pandemic erupted.

The project comprises two 36-storey towers near Orchard MRT station and the future Great World MRT station.

Envisioned by Dutch architecture firm MVRDV, the botanical towers are inspired by green living and the conservation of four heritage rain trees, while a pixel-patterned facade mimics a climbing plant on a tree trunk, CDL said.

The project was designed for the “new normal” of working from home. It includes co-working spaces on the 24th level and has function rooms equipped for hosting meetings and conferences.

Unit sizes range from 398 sq ft for a studio to 1,582 sq ft for a premium four-bedroom unit. There are also three penthouses, ranging from 2,185 sq ft to 2,605 sq ft.

Prices start at $998,000 for a studio, while a four-bedroom premium unit with a private lift is about $4 million. Bookings start on April 10, when the project is launched.

New home prices have remained stable even as developers’ margins have thinned owing to rising land and related expenses, which account for 60 per cent to 75 per cent of total costs, while construction has become pricier amid pandemic disruptions, Mr Chia said.

He also said, “I must emphasise that one size doesn’t fit all”, when asked if CapitaLand’s restructuring move to separate its property development arm from its more lucrative real estate management business will become a template for other property players.

“Our business model is different in terms of scale and residential development component. Our residential portfolio is quite different from CapitaLand’s,” he said.

“At some point, if there is a possibility, we will look at some type of restructuring, but it may not necessarily be the same as CapitaLand’s… The situation is quite different between CapitaLand and us.

“In terms of assets that (can be) extracted for value, we do have substantial assets in our portfolio. But CapitaLand doesn’t have the same type of assets on its end.”

Mr Chia also noted that CDL has a good record of winning tenders for sites from the Government Land Sales programme, and has its eye on a white site in Kampong Bugis that the Urban Redevelopment Authority has made available for application.

The white site, on the reserve list, will be released for sale to a master developer to allow for a comprehensive masterplan development in phases and the implementation of districtwide “car-lite” initiatives and sustainable urban solutions.

The 8.2ha site could yield up to 4,000 housing units and 50,000 sq m of gross floor area for retail, serviced apartments and offices, and for community use.

If CDL wins the site, it could “give quite a good land bank for the longer term”, Mr Chia said.

“So far, no one has triggered it, but we understand they are advancing the tender. We have to see how the Government responds to the market’s need for land replenishment.”

He added that private developments that are trying for a collective sale but are “very large in terms of dollar quantum, like Braddell View and Mandarin Gardens”, will face more challenges.

“Those that are below $1 billion will attract more interest.”

Ms Lee Mei Ling, CDL executive vice-president and head of property development, said that “in terms of land bidding, there won’t be a huge rush. All the developers will be cautious”.