Garden at Eden Hall on the market again

/ The Edge Property |

June 17, 2016 10:00 AM SGT

The asking price for the plot in front is $1,700 psf, while the plot at the rear has a price tag of $1,630 psf

The UK government will relaunch the sale of the land carved out from the eastern garden at the British high commissioner’s official residence on Nassim Road. With the price tag reduced by 20%, will there be takers this time around?

The UK government and Britons may be deeply divided on the Brexit issue — whether Britain should leave or remain in the European Union. However, the British government is very clear on one issue: It is going to sell what it considers “surplus land” that it owns in Singapore’s most prestigious Good Class Bungalow (GCB) address, namely Nassim Road.

Next week will see the relaunch of two plots of land on the eastern side of the garden at Eden Hall, the British high commissioner’s official residence. The two plots have a combined land area of 34,251 sq ft and account for 35% of the existing grounds of 97,889 sq ft

Both Plots A and B are zoned for development into GCBs. Plot A has a site area of 18,618 sq ft and a 36m frontage along Nassim Road. It includes a huge part of the garden beyond the driveway, an open parking area for six cars and a small outhouse. Plot B has a total land area of 15,633 sq ft, including a long driveway leading up to an elevated rectangular site adjacent to the residence.

The centrepiece of Eden Hall is the stately colonial-era, double-storey bungalow of 14,000 sq ft with six bedrooms and four reception halls. It is home to the British high commissioner and his family. And it is also where they entertain guests and celebrate events such as the Queen’s 90th birthday recently. The house as well as the front garden will remain intact.

Lim: With a softening in owners’ price expectations, the price gap has narrowed. This has opened up a window of opportunity for buyers who have been sitting on the sidelines.

Relaunch Last November, the two freehold sites at Plots A and B were launched for sale by tender. The price tag for Plot A was $41 million ($2,200 psf) and for Plot B, $31.3 million ($2,000 psf).

However, at the close of the tender in January, both sites remained unsold. “It wasn’t due to a lack of interest or bids,” says Sammi Lim, director of investment properties at CBRE, who is handling the sale. “It was a matter of timing, as the close of the tender coincided with the global stock market rout in January, which dampened sentiment.”

In the upcoming relaunch, the price tags for both sites have been adjusted downwards by some 20%. Plot A has been repriced at $1,700 psf, with an absolute price of $31.65 million. Meanwhile, Plot B’s price has been adjusted to $1,630 psf, or $25.48 million. The prices were revised after taking into consideration the prevailing market sentiment, recent transactions in the GCB market and feedback from various parties in the last tender, says Lim. “With a softening in owners’ price expectations, the price gap has narrowed. This has opened up a window of opportunity for buyers who have been sitting on the sidelines.”

The two plots are likely to attract primarily end-users, mainly professionals in their late 30s or early 40s, newly minted Singapore citizens or high-net-worth individuals buying for their children, notes Lim.

GCB buyers of 15,000 sq ft-to-18,000 sq ft plots will want houses of at least 10,000 sq ft to 12,000 sq ft in gross floor area. “They will want at least five bedrooms, all en suite, a home entertainment room and a garage for their cars,” says K H Tan, managing director of Newsman Realty, who specialises in marketing GCBs. “The tycoons who buy property in Nassim generally spend between $9 million and $10 million on the construction of the house alone, excluding fittings and furnishings.”

Artist’s impression of the Good Class Bungalow that can be built on the combined plot of 34,251 sq ft that has prominent frontage along Nassim Road

The lure of amalgamation Buyers have the option of purchasing both plots and amalgamating them. The absolute price for the combined site works out to $56 million. “Based on the response from the previous tender, there was keen interest from buyers looking to purchase the combined plots,” notes Lim. “They wanted the flexibility to reconfigure the site according to their needs.” Tellus Architects has even been engaged to create renderings of super bungalows that can be built on the combined plot.

At the $50 million-to-$60 million price level, the target market is business magnates with a personal net worth of at least $500 million, says Tan. “They are always on the lookout for large, regular-shaped sites in the Nassim area.”

The ability to buy and amalgamate both plots is not only attractive to multi-generational families but also to long-term investors, says Newsman’s Tan. “By buying both plots, the new owner will have the option to build their dream homes or sub-divide the sites for sale over the long term,” he points out.

This was what happened more than a decade ago. In 2002, the UK government carved out the western garden totalling more than 100,000 sq ft and put it on the market. Two Singaporean tycoons paid $50.4 million for the site. One of them was Sam Goi of food company Tee Yih Jia, while the other was Peter Kwee of European car distributor Group Exklusiv.

The duo split the land parcel between them, with Kwee taking the bigger piece of 63,300 sq ft. Goi built his house on his plot, and became a neighbour of the British high commissioner. Kwee sub-divided his plot into two. In 2003, he sold one of the plots, measuring 39,383 sq ft, to Indonesian businesswoman Sukmawati Widjaja, currently vice-chairman of Sinar Mas Group and executive chairman of Singapore- listed property group Top Global. Sukmawati has since built a palatial home on the site and moved in with her family.

The second plot, a triangular site of 23,922 sq ft fronting Nassim Road, was sold to Tay Liam Wee, the former chairman and managing director of Sincere Watch, in February 2012. The price was $47.84 million ($2,000 psf) and the deal was brokered by Newsman’s Tan.

He also brokered the previous transaction in Nassim Road, the site of the former Turkish Embassy, which changed hands for $43.53 million ($1,800 psf) in April 2010.

There has not been a GCB transaction on Nassim Road since 2012. Owing to the scarcity of GCBs and prestige of the neighbourhood, owners of GCBs in the Nassim area prefer to sit on their property if they do not achieve their asking prices, says Newsman’s Tan.

A classic example of just such a seller is Cheng Wai Keung, chairman and managing director of listed property developer Wing Tai Holdings. In April 2013, Cheng put up for sale a GCB sitting on an 85,000 sq ft elevated freehold site on Nassim Road. The price tag then was a jaw-dropping $250 million to $300 million, which translated into $2,941 to $3,529 psf for the site. As the offers did not come close to the indicated price range, the property was withdrawn.

According to Newsman’s Tan, regular GCB plots in the Nassim area can command prices in the range of $2,200 to $2,500 psf today. The UK government’s price tag of $1,650 psf to $1,700 psf for the two sites is therefore “a golden opportunity for those who want to own a plum site at Nassim for $25 million to $30 million”, he says.

Buyers return Based on the activity in the first six months of the year, it looks like buyers have returned. From January to June to date, there were 13 GCB transactions totalling $280.36 million, with average price at $1,336 psf, according to CBRE Research (see table). This is almost on a par with the same period in 2015 when 14 GCBs changed hands for a total of $249.18 million, or an average of $1,364 psf.

Activity is expected to pick up steadily in 2H2016, as buyers see an opportunity to upgrade to GCBs with bigger plots and more prestigious addresses, says Lim.

Recent GCB transactions include the sale of a bungalow at Oei Tiong Ham Park that sits on a land area of 11,722 sq ft. It fetched $19 million ($1,621 psf), according to a caveat lodged on June 6. Another GCB in the same neighbourhood on a slightly smaller plot of 10,064 sq ft was sold for $13.6 million ($1,351 psf), according to a caveat lodged in May.

The highest price achieved for a GCB this year was the recent sale on Kingsmead Road, off Victoria Park Road. The GCB, which sits on a 27,233 sq ft site, changed hands for $29 million ($1,065 psf) last month.

The relaunch of the two GCB plots at Nassim Road by the UK government is likely to stir interest in the bungalow market at this coveted enclave. “With the two sites priced below the last peak of $2,000 psf, there will be future upside potential, especially in such a sought-after location,” notes CBRE’s Lim.