A conserved building near the Lavender Street has been acquired by a unit fully owned by Kheng Leong Company, the company that is owned by business tycoon Wee Cho Yaw.
The freehold No 2 Cavan Road has been bought for S$38.71 million and there are plans to redevelop this into residential apartments which would have commercial units at the ground level.
HRL Properties and CBRE brokered this deal but have refused to comment on it.
The site is a part of the secondary settlement conservation area in Jalan Besar and enjoys conserved building status.
The site has been zoned for residential use with commercial at first level under the 2014 URA Master Plan and this also remains the same under the draft Master Plan for 2019.
It has plot ratio of 3.0 which translates into a possibility of 60,300 sq ft GFA considering the 20,100 sq ft. There is a small warehouse and industrial structure sitting on the site which was built in 1950s and hasn’t utilized maximum potential of this site.
As per the conserved status of the building, the front façade along with the side which include two-storey and three-story structures will need to be conserved.
There is a one-story structure at the rear which can be extend with addition of another five storeys upon getting necessary approvals from the Urban Redevelopment Authority.
It is understood that the buyer would have to pay high development charges for intensification of the land use and use the GFA to the maximum.
Siong Heng Realty has been the seller of this property. The family-owned company which isn’t known much in the market had recently sold another property 21 Cavan Road located just across the street.
Both these properties were vacant at the time of their sale. 21 Cavan Road is also a freehold site that has 4-storey light industrial structure that was finished in 1975.
This property can however be completely pulled down and redeveloped as it has been categorised at envelope control site under Jalan Besar’s Secondary Settlement conservation area.
The site has a total land area of 8,529 square feet and falls under the same zone as the No 2 Cavan Road.
The property was launched for sale at S$12.6 million and is said to have been bought by a private equity investment firm.
Luk Kwok Wing, Property Director of Kheng Leong revealed to the media that the company plans to redevelop 2 Cavan Road and target between 50 and 60 residential units and the ground floor would be used for commercial units.
He added that the company might not part with the commercial units and instead explore the rental income option.
He sounded confident with the prospects of redevelopment and stated that they would come up with something interesting that would optimise the large volume space available and use the property’s location to good effect.
He also said that the apartments are likely to be launched within a year or so.
Talking about the units at The Nassim condo which the company had acquired in 2017 he said that they had sold about three-fourth of the 45 units at the site at average price of S$3,000.
It is worth mentioning that Kheng Leong had acquired 45 units from CapitaLand the developers of the site back in 2017 in a deal of S$407.2 million at the rate of or S$2,300 psf.
CapitaLand had back then stated that it was selling the units at 18% discount as a part of its bulk sale initiative.
The developer had to take this step of selling 45 units in the freehold project in order to avoid penalties upon not being able to sell all the units within the deadline of August 2017 as set by the authorities.
They wanted to avoid the route of obtaining extra time in lieu of heavy penalties paid to the authorities.
The 45 units bought by Kheng Leong cover 177,023 square feet. As per the 2017 FY Results of CapitaLand the developer was able to get a profit of S$160.9 million from the sale of 45 units.