MAINBOARD-LISTED Roxy-Pacific Holdings will be launching its freehold condominium Mori on Dec 4, with an expected average price of S$1,900 per square foot (psf).
Inspired by the Japanese wabi-sabi concept of finding beauty in simplicity, Mori comprises 2 residential blocks of 5 and 8 storeys each, an outdoor onsen, several pools and lounges, and an open-air gymnasium. Its 137 units include 1 to 4-bedroom apartments, ranging from 484 square feet (sq ft) to 1,259 sq ft.
According to Teo Hong Lim, executive chairman of Roxy-Pacific, prices will start from S$1,680 psf. “However, we are in the midst of adjusting the price list as we intend to achieve an average psf price in the range of S$1,900,” Teo said.
The condominium sits on 37,131 square feet (sq ft) of land along Jalan Molek and Guillemard Road in District 14. It is 500 metres away from Dakota MRT station and 1 kilometre away from Aljunied MRT station.
Teo said the land was bought in November last year for S$93 million as he felt that the market was stirring.
He said that at the start of 2020 when Covid-19 cases grew in Singapore, he was concerned about how the market would turn out and “tightened Roxy-Pacific’s belt” in response. However, during the second half of the year he saw that Roxy-Pacific’s existing project, View at Kismis, was experiencing “continued sales momentum”.
Teo added that it typically takes 1 year from the initial acquisition date to launch a project. “So we can’t wait until our projects are substantially sold before we start going to the market to replenish our land bank. Ideally we want to start looking before other developers start moving, we always need that first-mover advantage,” he said.
According to Teo, he snapped up the property which would be developed into Mori because of its attractive price, location and size.
Mori is due to achieve its Temporary Occupation Permit in 2026, he said.
While demand is growing, Teo added that the stock of unsold apartments in the “mass market”, which he defines as projects priced between S$1,000 and S$1,999, is also diminishing quickly.
In February this year, Roxy-Pacific bought a 14,300 sq ft site at Institution Hill for S$56.6 million as part of a joint venture with Macly Group and LWH Holdings. The property is currently in its conceptualisation stage, to be developed into a boutique project comprising about 70 units. It is likely to launch in mid-2022, Teo said.
However, given increasing construction and labour costs, Teo added that developers might need to raise their breakeven price.
He said: “We hope to still be able to give good value to buyers. Because launch price is not purely based on breakeven, it is also based on what the buyers can accept.”
“I think we are rather cautious right now. If you buy a plot of land at a price that is too expensive and still add the construction costs, when the market starts to come down, the buyers might not accept your product.”
On whether market sentiments would ease any time soon, Teo noted that the market is “very difficult to predict”.
He said: “The current market seems to be quite flushed with liquidity, it is doing very well. Volume is good, prices are inching up. The last few land sales by bigger developers have been quite active, so I think the market should be stable for the next 1 or 2 years.”
“Of course everything is always changing,” Teo added.
He said that Roxy-Pacific continues to be on the lookout for “attractive and unique” sites.
In the meantime, Roxy-Pacific is also looking at privatisation. The company announced in September that it has received a pre-conditional voluntary general offer from TKL & Family for all the issued ordinary shares in the company. The offeror is a consortium formed by 11 individuals, including Teo and his family members.
According to Teo, the decision was made after considering that Roxy-Pacific’s management team “might need some flexibility” in response to the challenges brought about by the Covid-19 pandemic. “It’s also an opportunity for shareholders to exit their investment,” he added.
The family currently owns about 76 per cent of Roxy-Pacific. Should the privatisation go through, Teo will own a proposed 32.5 per cent.
Roxy-Pacific’s offer price is S$0.485 per share, which represents a 19.8 per cent premium over the stock’s closing price on Sept 14, 2021 – the last full trading day of the company prior to the announcement.
On when the privatisation will conclude, Teo said that the company is currently waiting for approval from the New Zealand government, which is required because Roxy-Pacific has two properties in the island country.
“Then after that, we will send out an offer document officially. We hope that shareholders will look at it favourably and that we can receive a 90 per cent acceptance rate.”
Shares of Roxy-Pacific closed flat at S$0.47 on Dec 2.