Published April 14, 2007

Della Lee sells just one Meyer Road property to Hong Leong

HONG Leong Group is said to have wrapped up a deal to buy only one of the adjacent Meyer Road properties owned by Della Suantio Lee of Lee Foundation, instead of both properties as indicated under an earlier conditional deal.

Hong Leong is said to be paying about $200 million for the freehold property, which has a land area of about 115,300 sq ft. The price works out to about $760 psf of potential gross floor area, including development charges (DC), according to industry observers.

This is a new record for land in the Meyer Road location - surpassing the previous record set in early 2000 when Viewpoint Condo was sold to Keppel Land for $598 psf per plot ratio (psf ppr) including DC. A couple of months before that, in November 1999, DBS Land bought First Mansion and Meyer Tower nearby for about $580 psf ppr.

The site that Hong Leong has bought is zoned for residential use with a 2.8 plot ratio - the ratio of potential maximum gross floor area to land - and a maximum height of 36 storeys.

Hong Leong could redevelop the site into a plush condo boasting sea views, with about 220 units assuming an average unit size of around 1,500 sq ft. Assuming a land price of about $760 psf ppr, Hong Leong's breakeven cost could be about $1,200 to $1,300 psf.

Industry observers say a new condo in the choicest stretch of Meyer Road should be able to sell for about $1,800 psf on a project-average basis.

Savills Singapore is believed to have brokered the sale of the site by Dr Lee, who is the wife of Lee Seng Gee, the eldest son of the late China-born philanthropist Lee Kong Chian. Her move to sell only one of their two Meyer Road sites means the couple are keeping the bungalow they have lived in for many years.

The next-door site being sold to Hong Leong has another house now standing on it, but the new owner will tear this down for redevelopment. The two sites have a combined land area of about 212,300 sq ft.

Hong Leong Group is experienced in the Meyer Road area. It developed The Atria at Meyer and The Makena during the 1990s property bull run. In September 2005 it bought Eastern Mansion farther up Meyer Road, closer to Amber Road, and an adjoining site at a combined unit land price of about $410 psf ppr.