GuocoLand bought Leedon Heights for $835 million

GuocoLand yesterday said it has bought Leedon Heights for $835 million in what is thought to be the largest ever lump sum paid for a collective sale site here.

The price works out to about $1,062 per square foot per plot ratio (psf ppr), including a development charge of about $40.2 million. Leedon Heights, in District 10, is located off Holland Road and Farrer Road.

The purchase will be the fourth major land acquisition in the last 12 months for GuocoLand, a Singapore-based developer controlled by Malaysian billionaire Quek Leng Chan. Leedon Heights will add about 825,000 sq ft to the group’s existing land bank of one million sq ft of gross floor area.

The developer said in a filing to the Singapore Exchange that the purchase, which will close in mid-2008, will be funded by debt and internal resources.

Tang Wei Leng, director of investment advisory services at property firm DTZ which brokered the deal, said that the site drew strong interest. There were five bids and one expression of interest in all - including from major Singaporean developers such as CapitaLand, City Developments, SC Global and Ho Bee Investment, she said.

The price paid by GuocoLand is slightly higher than that previously indicated by DTZ when it was first put up for sale. In March, when the site was first launched, DTZ estimated that could fetch its owners $780 million.

Including an estimated development charge (DC) of $40.2 million, the suggested price works out to $981 psf ppr.

The site has a land area of about 522,000 sq ft and a 1.6 plot ratio. When launching the tender, DTZ said that provisional permission has been granted for a 12-storey condominium with 384 residential units.

Said GuocoLand yesterday: ‘Given the locale - it is well-established with Singaporeans and foreigners alike - GuocoLand is confident of drawing strong interest from premium buyers from Singapore, the region and internationally.’

Data from the Urban Redevelopment Authority released yesterday showed that home prices grew a robust 4.8 per cent in the first quarter of the year, higher than the 3.8 per cent increase seen in the previous quarter. The hike was led by uncompleted projects in the Core Central Region (which includes Districts 10), where prices rose 7.3 per cent.

Right now, Leedon Heights consists of four blocks with a total of 314 units. Owners will walk away from the collective sale with upwards of $2.4 million each, Ms Tang said.

GuocoLand’s shares climbed 20 cents to close at a one-year high of $5.40 yesterday. The stock has climbed 108.5 per cent since the start of the year, compared with a 13.8 per cent rise in the benchmark Straits Times Index.

Source: The Business Times, 28 April 2007