Leedon Park Good Class Bungalow sold for $73 mil
Bungalow transactions in Good Class Bungalow Areas: 3Q2019*
AGood Class Bungalow (GCB) at Leedon Park was sold for $73 million ($1,643 psf), according to a caveat lodged with URA Realis last Friday. The property sits on a sprawling 44,435 sq ft, freehold site. Based on an Inlis search, the house belonged to Woo Kim Phoe. The new buyer of the GCB at Leedon Park has purchased the property for $73 million using a UBS trustee.
As the house is relatively old, the new owner is likely to tear it down and rebuild, says Steve Tay, senior vice president of List Sotheby’s International Realty. “Such big GCB plots are sought-after as the site can be redeveloped into a palatial house or subdivided into two smaller ones,” he adds.
Construction costs for a GCB typically range between $500 and $1,000 psf, depending on the reputation of the architects, quality of the fittings and finishing, as well as complexity of the architectural design. “Given the size of the land at Leedon Park, I expect the building cost to be in excess of $15 million for one GCB or two smaller ones,” Tay estimates.
With land costs in traditionally recognised prime GCB Areas near Botanic Gardens and downtown approaching $2,000 psf, “buyers are starting to see value in other GCB Areas such as Leedon Park or nearby Bukit Timah, which offer the convenience of amenities besides a prime address”, adds Tay.
He sees the Leedon Park and Ford Avenue GCB Areas gaining in popularity among the rich, given the lush greenery; the many lifestyle amenities such as Dempsey Hill and Holland Village; and the rejuvenation of the area with the upcoming One Holland Village. Top schools nearby include Henry Park Primary School, St Margaret’s Secondary School and Tanglin Trust School. The rejuvenation of Holland Village with the upcoming One Holland Village by a Far East Organization-led consortium and the convenience of the Holland Village MRT Station are an added bonus, Tay observes.
Attraction for both old and new rich
“GCBs attract both the new Singapore citizens and well-heeled Singaporeans who are seeking wealth preservation, especially those who want an asset that they can hand down to future generations,” he adds.
Two months ago, Tay had brokered the sale of a GCB at Chatsworth Avenue and another at Mount Echo Park for $28 million ($1,867 psf) and $27 million ($1,781 psf) respectively, jointly with KH Tan, managing director of Newsman Realty, who specialises in marketing luxury bungalows.
Tan says there has been a pick-up in both viewings and offers since the second-phase reopening post-“circuit breaker”. According to Tan, demand is coming from different groups of buyers — “the old rich and new rich in Singapore, the new Singapore citizens, those who want to buy an old house to tear down and rebuild, and those who want a relatively new home that requires minimal addition and alteration works”.
Based on caveats lodged with URA Realis, 12 bungalows in the GCB Areas were sold in the three months from July to September to date. Most of these deals are likely to have been done following the second phase of reopening since June 19, says Han Huan Mei, director of research at List Sotheby’s International Realty. Compared with the five deals done in the April-June period, the evidence clearly points to a pick-up in sales activity in the GCB market, she adds (see tables).
What stands out this year is that the number of GCB transactions in the July to September period is now on a par with that of 3Q2019. However, the deals done this year were much bigger than those done over the same period in 2019, based on caveats lodged for GCB deals of more than 15,000 sq ft, points out List Sotheby’s Han. This is further proof that bungalows on large sites are more sought-after, as both investors and owner-occupiers want more living space amid the need to work or study from home, she adds.
Bigger deals done in 3Q2020
“The current pandemic situation [has] enabled a meeting of buyers’ and sellers’ price expectations to facilitate these deals,” says Han. “There were eight such sizeable deals in 2020 compared to only four in 2019.”
The larger deal sizes in 3Q2020 lifted the total sales value for the 12 GCBS that were transacted to $335.6 million, which is 60% higher than the $209.68 million chalked up over the same period last year, based on Han’s findings.
In terms of psf price, however, deals done in 3Q2020 ranged from $873 psf to $1,867 psf; whereas those transacted in 3Q2019 were from $942 psf to $2,000 psf, based on Han’s analysis. “The price of GCBs is less straightforward because it takes into consideration several factors such as location, land area, age of building, site configuration and terrain, quality of finishes and other factors,” she adds.
Han attributes the resilience in the luxury bungalow market to the ultra-high net worth individuals in Singapore with deep pockets. “These GCB owners are able to hold their asset until there is an offer that meets their price expectations,” she adds. On the other hand, there are also investors who have been searching for a luxury home for some time and are willing to commit when they see one that meets their needs.
What’s more, GCBs are limited in number, as an increase in supply is only through subdivision of bigger plots into smaller ones. Hence, today, there are only about 2,800 GCBs within 39 designated GCB Areas, adds Han.
List Sotheby’s Tay is now in the midst of negotiating to secure a GCB sitting on a big plot of more than 30,000 sq ft on behalf a family. Sentosa Cove has seen a pick-up in bungalow transactions as well. At
Sentosa Cove, Tay recently brokered the sale of a villa on Cove Drive. The bungalow sits on a 99-year leasehold land area of 7,282 sq ft, and fetched $16.5 million ($2,266 psf). “The house overlooks Tanjong Golf Course, is nicely designed and furnished, and comes with a private lift,” he adds.
Tay is of the view that low interest rates, coupled with high levels of liquidity, have contributed to the increased demand for real estate.
Newsman’s Tan expects prices of GCBs near Botanic Gardens, such as Cluny Road, Nassim Road and Gallop Road, to hold up.
“Foreigners turned Singapore citizens like to live near Botanic Gardens,” he says. “They like the greenery and the prestigious address.”
However, it’s not just GCBs that have seen a spike in activity. Bungalows in the central area and the east have been “very vibrant”, says William Wong, managing director of Realstar Premier Group, which specialises in landed property segment.
In fact, 3Q2020 saw “record- breaking sales” for the firm. Some of the GCB deals brokered by RealStar included one on Old Holland Road that was sold for $21 million, another on Margoliouth Road for close to $29 million, and one at Bin Tong Park for $37.7 million. Meanwhile at Frankel Estate in the east, some of the deals included a detached house at Roseburn Avenue that changed hands for $10.3 million and another at Bowmont Garden for $7.07 million. In the prime Tanjong Katong and Mountbatten Road area, deals included the sale of a detached house on Crescent Road for $ 12.05 million, one on Wilkinson Road for $9.75 million, and another on Broadrick Road for $19 million.
Wong attributes the increase in transactions to “more newly-minted Singapore citizens buying landed properties lately”. He adds: “They