For much of the 1990s, Mr Tay was a partner and head of global corporate finance at an international accounting firm. Since he left, he has started his own boutique consulting firm, advising companies on corporate finance and mergers and acquisitions. For the last 12 years, Tay has also been investing in Good Class Bungalows in Singapore, particularly in the prime Bukit Timah neighbourhood. He bought his first GCB during the Asian financial crisis in March 1999: It was a bungalow at Wilby Road, which he paid S$4.2 million (S$259 psf) for and sold in mid-2008 for S$13.5 million (S$833 psf).

And, like most collectors, Tay owns “several” bungalows. One of them is a GCB at 18 Third Avenue, off Bukit Timah Road, which sits on a freehold plot of 19,420 sq ft. The house was built in 1995 and designed in Balinese style, with a mature garden containing more than 100 plant species. “Balinese-style homes like these are getting very rare,” says Tay. “Where else will you be able to find a view like this?”

The house has a porch that can easily fit eight cars. The first level contains three bedrooms with en suite bathrooms; the living room, dining room and kitchen are on the lower level. The house has full teak timber flooring, and soaring timber ceilings of up to 7m with a pitched roof. The main entrance doors are also timber and said to have been salvaged from a century-old church in the Philippines.
The living room has full-height glass sliding doors opening out onto the terraced garden, with stone steps leading to the swimming pool at the bottom of the garden. There is also a large outdoor entertainment area ideal for cookouts. The dining room overlooks a garden trellis and koi pond. The master bedroom suite is linked to the house by an air-conditioned glassed-up bridge, and also has a separate staircase leading directly to the garden and the swimming pool, which is adjacent to a separate guest house.

Tay likes Balinese-style homes, and his resi­dence — a GCB in Yarwood Avenue — also has similar architecture, with a huge koi pond in a central courtyard, and an equally lush garden. The house, which he purchased in late 2006 for S$9.5 million, has a freehold land area of close to 19,000 sq ft, with a built-up area of about 10,000 sq ft, similar to the size of the house at Third Avenue.

While the house at Yarwood Avenue is for Tay’s own occupation, the GCB at Third Avenue was purchased purely as an investment property five years ago. At that time, the GCB was valued at S$7.8 million (S$402 psf) and, over the years, has been leased out at monthly rental rates of S$24,000 to S$30,000. Thus, Tay’s gross rental yield has ranged from 3.7% to 4.6% a year.

The house at Third Avenue is now on the market with a price tag of S$28 million (S$1,442 psf). Jeffrey Sim, DTZ’s senior vice-president of the resale division, who is marketing the property, says good properties are hard to come by and difficult to replicate. If a new owner were to tear down and build something similar today, he estimates that the construction cost alone would be at least S$400 to S$500 psf, or S$4 million to S$5 million, based on a built-up area of 10,000 sq ft.
The house is also located just a short distance from the upcoming King Albert Park MRT Station, and GCBs located near MRT stations are also very rare, hence valuable, he adds.

GCBs triple in value in more than a decade
Sim, who has been marketing GCBs for the past 12 years, says: “When I first started marketing GCBs, prices were S$5 million to S$6 million. Today, some of the GCBs are going for S$30 million to S$40 million. For a long time, GCB prices were hovering at S$400 to S$500 psf, and now they have doubled or tripled.”

Prices of GCBs in the Bukit Timah-Holland Road area are already hitting S$1,400 to S$1,600 psf, notes William Wong, managing director of RealStar Premier Group, a bungalow specialist.

For instance, in April, a GCB at Astrid Hill off Holland Road sitting on a freehold plot of 22,012 sq ft was sold for S$35 million, or S$1,590 psf. The GCB is said to have been purchased by a Singaporean doctor. “He saw it in the morning and confirmed it at night, and the deal was done within the same day,” says DTZ’s Sim, who brokered the sale.

Just a fortnight ago, a GCB sitting on a freehold land area of 15,076 sq ft at Fifth Avenue was sold for S$23.5 million (S$1,559 psf), and one at Maple Lane sitting on a site area of 16,368 sq ft was sold for S$22 million (S$1,344 psf). Both deals were said to have been brokered by RealStar.

Transaction volume this year has fallen significantly compared with last year. Based on caveats lodged with URA Realis, 25 GCBs have changed hands this year, versus about 50 in the same period last year, according to CB Richard Ellis Research. While transaction volume has halved, average prices of GCBs achieved year-to-date have actually increased 15.7%, from an average of S$1,021 psf over the same period last year to S$1,182 psf this year. “Prices are still holding up and have in fact appreciated slightly this year,” notes Douglas Wong, director of luxury homes at CBRE.

While the rising prices of GCBs over the past year may have stifled the volume of sales transactions, “new price benchmarks could still be achieved this year, as prized GCBs and GCB sites are rarely available and high in demand”, says Steven Ming, executive director of investment and Prestige Homes at Savills Singapore.

This year has also seen half a dozen GCBs changing hands at prices above S$30 million, compared with eight such transactions for all of 2010, which was a record year in terms of sales, with about 105 GCBs worth S$2.1 billion having been transacted.

At Ewart Park located off Holland Road, a GCB sitting on 33,551 sq ft was recently sold for close to S$38.6 million (S$1,150 psf). The sale is said to have been brokered by RealStar.

In the neighbourhood of Old Holland Road, an old GCB sitting on a large plot of about 40,000 sq ft is going for S$55 million. The site can be subdivided and redeveloped into two smaller GCBs.

The highest-priced GCB sold this year in terms of absolute amount is at Yarwood Avenue, off Bukit Timah Road. The GCB is located at the end of a cul-de-sac and sits on a sprawling 69,546 sq ft, 999-year leasehold site. It was sold for a whopping S$59.5 million (S$856 psf) in April, according to a caveat lodged with URA Realis. On the grounds is an original single-storey bungalow built in the 1950s/60s era as well as a tennis court. The site is large enough to be subdivided into three smaller GCB plots.

According to market sources, RealStar brokered the sale of the Yarwood Avenue site, and the buyer is said to be a Singaporean who purchased it for his own occupation.

“Such large GCB plots with the potential for subdivision into smaller GCBs are attracting the interest of Singaporeans with strong buying power,” notes RealStar’s Wong. The number of interested parties looking at big-ticket GCBs in the S$60 million to S$70 million price range has also increased, he adds.

S$70 mil GCB, anyone?
This substantial increase in the prices of GCBs is good news for owners such as Madam Chong, dubbed “the Queen of Leedon Park”, as she has been investing in GCBs in the Leedon Road and Leedon Park neighbourhood since 1978.

In mid-1996, Chong had purchased a colonial-era bungalow sitting on a sprawling 43,928 sq ft freehold site at 35 Leedon Road for S$17.7 million (S$403 psf). Over the years, she has put the property on the market, and then taken it off again. “There have been several times I’ve been on the verge of selling, but something happened and the deal was called off,” she admits.

That has turned out to be a blessing in disguise, as Chong’s asking price for the Leedon Road GCB is now S$70 million (S$1,594 psf). “I’ve recently received an offer of S$68.8 million,” she says. “And just yesterday, another agent mentioned that a prospective buyer is looking at a price somewhere near S$70 million. If I get a good price, I will sell.” Chong is also aware that such large GCB plots are rare these days, as many have been carved up into smaller GCBs over the years.

In fact, niche developer George Lim had purchased the GCB adjacent to Chong’s for S$15.1 million in late 2005. The freehold 43,250 sq ft site was also occupied by a colonial-era bungalow, but Lim subdivided the site into two GCB plots of 21,000 to 22,000 sq ft each. He tore down the original house and built two luxury bungalows, equipped with the latest high-tech home features, a gourmet kitchen, home theatre, ample indoor and outdoor entertainment area, a large swimming pool, koi pond, and all bedrooms with en suite bathrooms. The houses were sold in 2008 for S$27.5 million (S$1,303 psf) and S$25 million (S$1,129 psf), setting a new record for the Leedon Road neighbourhood as well as prices of new GCBs at that time.

Both transactions were brokered by K H Tan, managing director of Newsman Realty and a GCB specialist. Chong has appointed Tan as the exclusive agent for her property at Leedon Road. If the sale does go through at her asking price, it would be the highest GCB transaction so far.

Lim purchased another large plot at Leedon Park, a GCB sitting on a freehold plot of 41,850 sq ft last December, and paid a cool S$61.4 million (S$1,467 psf) for the site. It was the largest transacted GCB last year.

GCBs could hit S$3,000 psf
Very few GCBs come up for sale in Tanglin Hill, a neighbourhood that is home to tycoons such as Kwek Leng Beng and where Hong Leong owned many of the GCB plots. A transaction was last done in 2007, when a bungalow at Tanglin Hill Villas was sold for S$14.75 million (S$975 psf). In March this year, a GCB sitting on a 23,982 sq ft freehold site was sold for S$38.8 million (S$1,618 psf).

The buyer of the house at Tanglin Hill is said to be a mainland Chinese-turned-Singaporean who bought it without even having a chance to see the interior of the house, as it is currently tenanted by the Brazilian Embassy.

“These are the ultra-rich, the same people you see driving the Lamborghinis and Ferraris,” says DTZ’s Sim, who brokered the sale. “If you buy a GCB of S$25 million to S$30 million, you need an asset size at least double that amount.”

Sim says the road from new rich to seriously wealthy general­ly follows this trend: First comes the small bungalow; next, the flashy car or a fleet of such cars; and then the most coveted of all, the GCB. “It’s the ultimate status symbol that tells the whole world, ‘I’ve arrived,’” he says.

He is confident that prices of GCBs will reach S$3,000 psf one day. “Just look at the prices of the super high-end condos, which are hitting close to S$6,000 psf,” he says. “What’s to stop GCBs from reaching S$3,000 psf? You’re talking about rare bungalows, with limited stock, and it’s something that the ultra-rich covet. And, for the solidly rich, they don’t just buy one GCB; they collect a few.”

Cecilia Chow is City & Country editor at The Edge Singapore

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