July 13, 2007

Engineering firm joins growing band of boutique developers

Sesdaq-listed TEE has been building up property portfolio with flurry of buys

By Erica Tay

BIG-GUN property companies are not having it all their own way any more, with a growing band of johnny-come-latelies grabbing a slice of the booming redevelopment market.

In fact, so feverish has the residential property market become that even companies in other sectors are trying their hand at buying old buildings and redeveloping them into luxury homes.

Besides the entry of engineering-based United Engineers and builders Straits Construction and Chip Eng Seng, another ambitious entrant is TEE International, a Sesdaq-listed company with a market capitalisation of around $54.3 million.

Singapore-based TEE, or Trans Equatorial Engineering, has been in electrical and mechanical engineering services since 1980. Its chief executive is Mr Phua Chian Kin.

Since the start of this year, TEE has been acquiring a string of freehold terrace houses and apartments - including in the upmarket Cairnhill district and Bukit Timah's exclusive Sixth Avenue - with plans to develop luxury 'boutique' homes.

TEE announced its biggest buy yesterday - a collective deal for the 32-unit Merlin Mansion at East Coast Road for $25.5 million. TEE, together with joint venture partner Tenpage, has received 100 per cent acceptance from the 32 units' owners, who stand to reap about $800,000 on average each.

The site has the potential for '52 units of boutique designer apartments with amenities such as a lap pool, children's pool, playground and others', TEE said in a statement last night.

TEE started quietly buying small properties in the Thomson and Toa Payoh areas in January and in May, set up a wholly owned property development subsidiary, TEE Development.

Acquisitions have picked up since the unit was formed, with a number of terrace houses at Cairnhill Circle among its purchases.

One of these homes - No.47 - sold for $7.7 million while No.51 fetched $5.5 million.

'The company intends to redevelop the properties into a block of boutique luxurious apartments', it said.

Last month, TEE made a collective purchase of units at Rambai Road, also in the East Coast area, for $3.5 million.

Two days ago, it snapped up a freehold property on Sixth Avenue for $2.22 million.

It is not the only small developer eyeing the upscale residential market.

In March, Sing Holdings, a company then worth $97 million, paid $361 million for Hillcourt Apartments, also in the Cairnhill area, in a collective deal. That worked out to $1,542 per sq ft per plot ratio.

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