City&Country: SDB to sell OKIO units in KL

Singapore is turning out to be an exciting place for Selangor Dredging Bhd’s (SDB) growth. The developer is embarking on its third project in the island republic, a mixed-use development called OKIO on Balestier Road in central Singapore.

Managing director Teh Lip Kim tells City & Country that the project is called OKIO because that is what the area is known as in the Hokkien dialect.

“The locals know Balestier Road as Okio, which means ‘black bridge’ in Hokkien, so we selected the name because of that and also to recognise the area’s cultural heritage,” she explains. There was once a bridge in the area, but it is gone now.

Balestier Complex, which currently sits on the 0.5-acre site, will be demolished to make way for the project. The building was bought en bloc for S$43 million in January 2008.

OKIO’s first four levels will be for commercial purposes, while the other 14 storeys will be for residential units. The project, comprising 10 commercial and 104 residential units, will have a gross development value (GDV) of S$102 million.

In February, the developer launched 50 residential units in Singapore, and at the time of writing, 40 of them had been sold.

The other 54 residential units have been reserved for Malaysians, and will be launched in Kuala Lumpur from May 6 to 8.

The residential units will start from the podium deck on the fifth level, where a 25m swimming pool, hydrotherapy pool, gym and barbeque pit will also be located. While the built-ups will range from 420 to 1,098 sq ft, most of them will be from 420 to 700 sq ft. The smaller units will have one bedroom, while the rest will have two.

Teh explains that the decision to build small units was a deliberate one. “We’ll build small units to maximise the space we have. The whole residential unit has been thought through and we will have it fitted with customised furniture, such as a sofa set, and other appliances.

“Besides, small units are affordable for most people,” she says.

The residential units are selling from S$1,400 to S$1,700 psf, while the commercial ones are going for S$2,029 to S$2,250 psf.

JGP Architecture Pte Ltd’s Lim Eng Kwee, the architect of the project, says there will be eight units per floor. The units on the podium level will also have a private enclosed space.

“The design is Zen-like, for residents to relax and feel like they are moving into another realm,” says Lim. “Also, the residences are set back 30m from Balestier Road.”

The units will come with a built-in sofa, fridge, microwave oven, washing machine-cum-dryer, built-in wardrobes, a pull-out dining table and air-conditioners. A unique element will be the suspended clothes line.

“The suspended clothes line came about from thinking about the practical daily activities, like the need to have a place to hang the laundry. It also ties in with making the best use of available space,” Teh explains.

Lim says that to have additional storage space, special permission was sought to do away with the bomb shelter mandatory in all high-rise buildings and convert the space into a store room.

Owing to the limited space, fixtures like the dining table and sofa set will be customised. “We anticipate that store-bought furniture may not fit in well, or it may be difficult to look for suitable furniture to fit into the smaller spaces. The built-in sofa will have a dual function, where the leg rests can be converted into a coffee table, while the dining table can be tucked away under the kitchen counter top so it won’t be in the way. This is to maximise space within the apartment,” says Teh.

She adds that SDB prides itself in building living spaces that are practical, and this includes the choice of materials used. “We have selected flooring and counter top materials that enhance the look and feel of the home — white oak flooring and white solid surface countertops give the home a nice neutral tone.”

One-bedroom units are mainly bought for investment, while the two-bedroom ones are usually for the buyers’ own occupation. The rental yield for a one-bedroom unit is estimated to be S$3,000 per month, or more than 5% per year. Meanwhile, a two-bedroom unit can fetch S$3,500 to S$3,600 per month, or about 5%.

The development is located near the expressways, and the popular Whampoa Market is within walking distance.

The project is seen as a bridge between the old and new at Balestier Road, which has been earmarked as a conservation site by the government. Older buildings with intricate exterior motifs and designs have been and will continue to be restored.

The commercial units comprise both shops and offices. Four shop units, three of which are duplexes, take up the first and second levels. The duplex units, which range from 570 to 2,357 sq ft, have separate entrances.

The six office units are on levels three and four, with built-ups of 753 to 1,023 sq ft. The
total net saleable area of the offices and shops is 66,556 sq ft.

Other projects
SDB has another project in Singapore, a condominium on Cavanagh Road that will be launched in July. The land, measuring about 20,000 sq ft, is directly behind The Istana grounds.

The developer bought the land and an existing residential building en bloc for S$42.38 million in July 2010. The project has an estimated GDV of about S$85 million.

SDB’s existing projects in Singapore have shown good take-up rates. Its first project in the island republic, completed in 2010, was JIA on Wilkie Road. The 22 condo units, which have a GDV of S$55 million, have been fully taken up.

Meanwhile, its second project, Gilstead Two, which is on Gilstead Road and near the Newton MRT station, is 95% sold. The 110-unit high-rise condominium has a GDV of S$200 million.

“We are very positive about the Singapore property market and will continue to look for opportunities there. Our focus will be in or close to the city centre,” says Teh.

Singapore attracts a large number of professionals owing to its position as a business and financial hub, and this has driven demand for residential units among property investors, observes Teh.

“Margins for properties are high, from 15% to 20%, and yields are between 3% and 4%,” she says. “While tighter measures imposed by the Singapore government on property financing have somewhat dampened the market, these measures aim to curb excessive speculation that could otherwise lead to a property bubble. Despite these new measures, the Singapore property market remains reasonably buoyant.”

SDB recently purchased a property in London’s Kensington High Street for £9.825 million (RM48.3 million). The property includes an existing 4-storey building that has HSBC Bank as its tenant. The purchase in March marked the developer’s first foray into the London property scene.

Back home, SDB is expected to launch its Batu Feringghi development in Penang in September or October. “This project will comprise sea-view SoHo units,” says Teh.

The GDV of the project is estimated to be RM200 million, while the built-ups are expected to range from 1,000 to 1,900 sq ft. The 4.7-acre tract for the development was purchased in January 2008 for RM24.6 million.

SDB has a number of developments in the pipeline, including a three-acre commercial and retail project behind its Five Stones development in SS2, Petaling Jaya (slated for launch in 2012), and a 15-acre residential project in Dengkil, Sepang.

The developer’s Dedaun condo project in Ampang is 70% sold. Earthworks should start in June. The 38-unit condo has a GDV of RM160 million.

Five Stones in SS2 and 20Trees West in Taman Melawati, KL, have been sold out. Five Stones is a RM414 million project, comprising 377 units of condominium and low-rise homes, while 20Trees West comprises 48 units of 3-storey bungalows that have a GDV of RM170 million.

Meanwhile, there has been little progress on SDB’s Damansara 21 project in Medan Damansara since a stop-work order was given in 2008. The area was to have 21 luxury bungalows on a hill slope.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 856, May 2-8, 2011