Singapore tycoon Kwek Leng Beng’s City Developments and his Malaysian billionaire cousin Quek Leng Chan’s GuocoLand submitted the top bids totaling S$1.35 billion ($1 billion) for two hotly contested residential sites in Singapore, showing confidence that housing demand in the city-state will remain resilient despite a property slump.
City Developments offered S$768 million for the 19,567 square meter site on Jalan Tembusu in one of the city’s most exclusive enclaves in the eastern region. The company plans to build four blocks of up to 21 stories each, with a total of 640 residential units on the 99-year leasehold site, if the government accepts its top bid.
GuocoLand, in partnership with Intrepid Investments and TID Residential—which are linked to Kwek’s Hong Leong Group—submitted the highest bid of S$586.6 million for a 17,136 square meter plot in Lentor Hills Road in the northern part of Singapore. In July, GuocoLand won the auction for a nearby residential site on Lentor Central, beating nine other bidders.
The first two state land auctions of the year drew a total 14 bids (with eight contesting the Jalan Tembusu site and four bidding for Lentor Hill) as developers continue to replenish their landbanks despite the property cooling measures introduced by the government in December as housing prices climbed to record levels. New homes sales slumped 58% to 650 units last month, compared to November, government data showed.
“While there will be some headwinds on the back of the property cooling measures, we believe that the market remains well-supported by resilient fundamentals such as an improving job market and strong household balance sheets,” Sherman Kwek, group CEO of City Developments said in a statement. “There remains genuine demand from first-time home buyers and upgraders, who are relatively less affected by the cooling measures.”
His optimism springs from robust demand for some of the group’s projects. City Developments developed several projects in the eastern region including Amber Park, which is almost 90% sold, Kwek said.
The acquisition of the Jalan Tembusu plot provides the City Developments an opportunity to build another iconic development, which will have unobstructed views of the CBD skyline and the Singapore Sports Hub, as well as some sea views towards the South, the company said. The site is near the upcoming Tanjong Katong MRT station on the Thomson-East Coast line that’s currently under construction and about 15 minutes drive to the central business district.
“In the addition to local homebuyer market, Singapore remains an attractive destination to foreign investors due to many factors such as its political stability, financial status, healthcare facilities and educational institutions,” Kwek said.
Reflecting robust demand for prime housing in the city-state, City Developments said it and partner CapitaLand has sold 83% of the 696-unit Canninghill Piers, which would be the tallest residential structure along the Singapore River when completed, since the project was launched in November. Average selling prices for the development across the Raffle Place CBD has remained firm despite the cooling measures, City Developments said.
Sherman’s father Kwek Leng Beng is the chairman of Singapore’s Hong Leong Group, which was founded by his father in 1941. His uncle Quek Leng Chan, also a billionaire, runs a separate group in Malaysia, also called Hong Leong.
With a net worth of $8.5 billion that he shares with his family, Kwek, 80, was ranked Singapore’s eighth-richest person on the list of Singapore’s 50 Richest that was published in August. His cousin Quek has a net worth of $9.6 billion and Malaysia’s second-richest person.