Roxy-Pacific eyes more residential land; hospitality takes a toll on revenue
EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Once completed, the future residential condominium at Institution Hill is likely to yield over 50 units of one- and two-bedroom apartments, shares Teo Hong Lim, executive chairman and CEO of Roxy-Pacific Holdings.
In February, Roxy-Pacific and its consortium partners acquired a 999-year leasehold residential plot at 10A and 10B Institution Hill for $33.6 million (Credit: Cushman & Wakefield)
In February, Roxy-Pacific and its consortium partners — Macly Group and LWH Holdings — acquired a 999-year leasehold residential plot at 10A and 10B Institution Hill for $33.6 million.
The partners plan to amalgamate the site with another 999-year leasehold site at 11 Institution Hill. Once combined, the site will have an estimated total area of 14,300 sq ft, with a total gross floor area of 40,040 sq ft for residential development.
Earlier, the property developer acquired another residential site in the Guillemard enclave for $93 million. The site, occupying a land area of 37,131 sq ft, is slated to yield 137 residential units. Roxy-Pacific aims to launch the condo by 3Q2021.
Teo tells The Edge Singapore in an interview that the firm is actively looking to acquire more sites, as its residential stock is running low. “We continue to be highly selective in land acquisitions, with a focus on freehold sites in Singapore,” he said in a separate statement released in February.
RV Altitude, its 140-unit project in River Valley, District 9, is already fully sold. Over 1Q2021 alone, 84 units were sold at the project, which offers two-bedroom units ranging from 441 to 624 sq ft. The development is a two-minute walk to the upcoming Great World MRT Station on the Thomson-East Coast Line.
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Roxy-Pacific has acquired a residential development site in the Guillemard neighbourhood for $93 million (Credit: Cushman & Wakefield)
Located in the Beauty World neighbourhood, View at Kismis is another of Roxy-Pacific’s residential projects. It comprises 186 units spread across six 5-storey blocks. To date, 180 sales transactions there have been lodged with URA. The developer designed the project to emulate vineyard living. It is set to occupy an undulating plot of 100,337 sq ft, with greenery covering 40% of the surface area.
Teo shares that when it comes to potential deals, the firm is open to all types of sales. “We don’t [particularly focus] on a specific type of deal, be it collective sales or government land sales sites — so long as the numbers stack up,” he says.
All such deals “are open to bidding”, he adds, “but sometimes they fail”. Teo notes: “After they fail, people tend to forget about them, but when the prices become more palatable, we come in and ask them again: ‘Do you want to sell?’ And it’s a good thing because then we don’t have any more competition. People like to look at what is currently available. They don’t look at what was available.”
Teo believes that the property market now “has its challenges”. He explains: “It’s a two-track market, so in the high-end market, there is a lot of holding stock… whereas the more mass-market [projects] are selling well because they are more affordable.”
He adds: “So it’s a good market for the mass-market [projects], if you have the stock to sell, provided that the land is bought at a reasonable price.”
Teo: We continue to be highly selective in land acquisitions, with a focus on freehold sites in Singapore (Credit: Samuel Isaac Chua/ The Edge Singapore)
Hotel properties affected by pandemic
For FY2020, Roxy-Pacific reported a net loss of $29.5 million for the full year, which it attributed to impairment charges on its hotel assets and properties held by its overseas associated companies, and additional tax expenses incurred for its divested investment in Hong Kong.
On the hospitality front, the developer wrote off sunk costs incurred by its hotel development project in 360 Little Bourke Street, Melbourne. It had acquired the property in December 2017 and intended to redevelop it into a hotel, but changed plans as the pandemic caused countries to impose border controls, thereby impacting tourism.
The group also had to temporarily close Noku Osaka in Japan, one of its self-managed boutique hotels, since November last year. Teo shares that the property is targeted at tour groups. “In normal times, tour groups just come and fill up the hotel, and we don’t need to do individual marketing. But in such times, I think [demand from] tour groups will be the last to come back,” he says. Furthermore, the project is “not in a location suitable or attractive for staycations”, he adds.
The developer also owns a hotel property in Kyoto. Noku Kyoto “is different because it’s more like a boutique property, opposite the Imperial Palace. So we can get occupancy for that, although demand is still weak”, Teo says.
In a bid to spur tourism in Japan, its government has rolled out the equivalent of Singapore’s SingapoRediscover vouchers scheme, called the Go To Travel campaign. However, the campaign, which subsidies up to 50% of domestic travel costs, has been suspended as the country battles its fourth wave of coronavirus cases.
Meanwhile, the group’s 91-key boutique resort in Phuket is still under construction, at 70–80% completion before furnishings, says Teo. “We are just pacing the momentum to try to open at the end of this year. But we will need to watch the market. If there’s no open tourism yet, then we may have to soft-open or delay opening.”
RV Altitude, Roxy-Pacific’s 140-unit project in River Valley, District 9, is fully sold (Credit: Samuel Isaac Chua/ The Edge Singapore)
Positive on office outlook
Teo believes that sentiment for the office market is turning optimistic soon, noting that companies are already asking staff to return to the office. But in the short run, “it’s quite difficult to be able to sign on new tenants, because companies are probably in cost-control mode”, he says.
Teo adds: “That’s why if we buy any new buildings, we would probably need a longer lease period, or make sure that the [existing] occupancy rate is high.”
Last year, the developer acquired an office building at 350 Queen Street, in Melbourne CBD, for A$145 million ($145.8 million). The purchase was made via a joint-venture partnership with TE Capital Partners, a Singapore investment management firm set up by family members of Tong Eng Group.
Check out the latest listings near Institution Hill, Guillemard Road, RV Altitude, View at Kismis, Great World MRT Station
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