Published May 23, 2007

Heeton Hldgs, Koh Brothers shares up

New benchmark prices of Orchard area condos near firms' project boost stocks


REPORTS that property developers at the Leonie Hill/Grange Road area next to the Orchard shopping belt are setting new benchmark prices have boosted the stocks of two listed companies with developments in the area.

The Lumos: Heeton and Koh Brothers bought the site in April '06 for $79.2m

Heeton Holdings' stock leapt 12 per cent or 7.5 cents to a new high of 70 cents, while Koh Brothers edged up 1.5 cents to 44.5 cents in the wake of reports on Monday that Soilbuild Group Holdings will be selling its units at Leonie Parc View at well over $3,000 - a new high for the area.

Having sold 18 of its 44 units at almost $3,000 psf even before the units are built, Soilbuild is reportedly looking at selling the remaining prime apartments at between $3,200 and $3,600 to buyers overseas. Meanwhile, it was reported that Parkview Eclat, a small condominium at Grange Road, broke through the $4,000 psf level.

Brokers said this had prompted a re-rating of the valuation for The Lumos - a project near Leonie Parc View and Parkview Eclat - owned by Heeton and Koh Brothers, who each hold a 50 per cent stake in the development. The two firms bought the site in April 2006 for $79.2 million, or about $880 psf per plot ratio, including a development charge of about $3.9 million. Coupled with an estimated construction cost of around $400 psf, the total cost for the developers is just under $1,300.

But at $3,000 psf selling price, Heeton and Koh Bros stand to make an estimated $210 million, or $105 million each. This works out to 47 cents per share for Heeton and 22 cents per share for Koh Brothers (probably the reason why the stock of the former moved more than the latter). Heeton, which has a market value of some $155 million and whose other investments include Sun Plaza which it jointly developed with Koh Bros and some 200 wet market stalls island-wide, launched a 17-unit residential project at Stevens Road earlier this year.

Koh Brothers, with a market cap of $213 million and whose previous projects include The Montana off River Valley Road and The Sierra in Mount Sinai, bought Alocassia Apartments on Bukit Timah Road last year.