Heeton May Partner Fund For $72.8m Grange Rd Site

Source : The Business Times, 16 Aug 2007

PROPERTY company Heeton Holdings may partner a foreign fund to develop a $72.8 million redevelopment site on Grange Road that it has just acquired.

Heeton’s chief operating officer and executive director Danny Low yesterday said three foreign funds had initially approached Heeton. He would not say which fund it had decided to partner as details are still being finalised. He said the fund is not yet exposed to Singapore real estate.

Asked if the potential partner might be affected by the current global credit squeeze, Mr Low said it was not, and that confidence levels, as far as Singapore projects were concerned, were still high.

He added: ‘If they have the funds to invest, they will have to invest it. And in Singapore, the fundamentals are strong.’

A partner with deep pockets is part of Heeton’s growth strategy, especially as property development is a key revenue generator. Its 53-unit The Lumos at Leonie Hill has just been soft launched and is already 40 per cent sold. Thirty per cent of the sales were to foreigners.

Mr Low expects to launch another project in Pasir Panjang in November.

Heeton, which also owns investment property including Sun Plaza in Sembawang and six wet-market buildings, now aims to generate 30 per cent of its revenue from overseas projects. Earlier this year, it launched a 300-unit residential development in Damansara Heights, Kuala Lumpur, with partners AIG, the global insurance company, and Malaysia’s Lion Group.

It has two projects in Bangkok and is looking for a development site in Vietnam.
Its latest site on Grange Road - Grange Court - is expected to be launched in Q2 2008. Heeton was the highest of about five bidders, all boutique property developers. And the price paid works out to $1,706 per square foot per plot ratio excluding development charge. The break-even price is about $2,500 psf.

Mr Low said the company expects to build a 50-unit development on the site with a focus on smaller units, which sell faster nowadays since they are more affordable.