Option given to CEO of Auric Pacific to purchase bungalow on Belmont Road for $55.5 million

A member of the Tay family, who owns the OG Department Stores group, purchased the freehold property in late 2019 for S$34.5 million.

Aug 19, 2022



A FREEHOLD bungalow in the Belmont Park Good Class Bungalow (GCB) Area is in the process of being sold for S$55.5 million, or almost S$2,055 per square foot (psf) on its 27,000 sq ft of land.

A two-story house with a swimming pool sits on the rectangular site. David Chew, who used to run The Stratech Group, is reported to have created the property in the early 2000s. Following Stratech's collapse, the mansion - held by Chew and his wife, Leong Sook Ching - was sold in October 2019 via a mortgagee sale by Deutsche Bank for S$34.5 million or S$1,278 psf to Woo Tsung Chwen, a member of the Tay family behind the OG Department Stores group.

Woo is said to have offered an option to purchase to Andy Adhiwana, CEO of Auric Pacific Group, this week for S$55.5 million. Woo stands to profit by almost 60%, or S$21 million, if the transaction is completed (selling price less his purchase price, without factoring in stamp duties, legal fees and other expenses). Woo is said to have improved the property. Market observers say that the house is habitable, but Dr. Adhiwana may remodel the property in the medium future. He is Stephen Riady's son-in-law and the executive chairman of the mainboard-listed property, healthcare, and consumer conglomerate OUE.

In 2017, Riady (Auric Pacific's majority shareholder) and Dr Adhiwana presented a voluntary offer to privatize and delist Auric Pacific.

Some experts consider the S$2,055 psf on land area to be a reasonable price.

"Generally in this region, GCB land cost between S$2,000 psf and S$2,500 psf of site space," said William Wong, founder of Realstar Premier, which was not engaged in the sale. This site has a somewhat narrow frontage on the road. The biggest difficulty in building a new home on the location is that the land slides downwards. However, the current house on the property is habitable. It is being sold at near to the lower end of the land cost range, at S$2,055 psf, for a plot size of 27,000 sq ft."

While most GCB purchasers are unlikely to be interested in a property with a short road frontage and sloping terrain, a buyer who values privacy may find this an excellent choice, and a talented architect may come up with an appealing design, according to Wong.

Bungalows in the 39 gazetted GCB Areas are the most prestigious type of landed dwelling in Singapore, with the Urban Redevelopment Authority (URA) imposing rigorous planning criteria to preserve their exclusivity and low-rise character.

The URA has set a minimum plot size of 1,400 square meters (about 15,070 square feet) as the planning standard for newly constructed bungalows in GCB Areas. To be able to purchase a landed property in a GCB Area, one must be a Singapore citizen.

Year-to-date decline in GCB transactions

Transactions in the GCB market have declined dramatically due to a widening buyer-seller price differential, as well as bad sentiment caused by global uncertainty on the geopolitical and macroeconomic fronts, as well as the imminent prospect of a recession.

"The uncertain economic situation and rising interest rates may give purchasers a cause to wait and see if owners drop their pricing expectations," Steve Tay, senior associate vice-president at List Sotheby International Realty, said (List SIR).

According to List SIR's examination of URA Realis caveats data retrieved on August 18, there were 33 sales in GCB Areas for almost S$833 million between Jan 1 and Aug 5 this year. This is significantly less than the 65 transactions totaling nearly S$2 billion during the same period last year. The total for previous year was 90 transactions worth S$2.6 billion.