Billionaires Double Down On Singapore Prime Property Buys As Demand For Luxury Homes Surge

Kwek Leng Beng, chairman of City Developments, speaks during a news conference in Singapore.


Nicky Loh/Bloomberg

Billionaires Kwek Leng Beng and Gordon Tang are buying S$965 million ($704 million) worth of prime properties in Singapore, doubling down on their investments in redevelopment sites in and around the city’s financial district amid soaring demand for luxury homes.

City Developments—controlled by Kwek and his family—said late Thursday it agreed to buy Central Square from Far East Hospitality Trust, a unit of Robert and Philip Ng’s Far East Organization, for S$315 million. The Singapore-listed developer said it plans to combine Central Square with its adjacent Central Mall and redevelop the two sites (with combined area of about 21,400 square meters) into a mixed-use office, hospitality, serviced apartments and potentially a residential component.

Developers have been stepping up the redevelopment of older properties in land scarce Singapore to tap into the soaring demand for housing in one of the world’s most expensive real estate markets. Some 4,267 new residential units were sold in the third quarter, up 23% from the previous three months, latest data from the government showed.

The acquisition of Central Square is expected to be completed in the first quarter of 2022. City Developments said it will pay Far East Hospitality an additional S$18 million if it gets government approval to add a residential component in the project.

“The strategic acquisition of Central Square crystallizes our master plan to shape the precinct’s transformation into a new and vibrant lifestyle hub,” Sherman Kwek, group CEO of City Developments and eldest son of Kwek Leng Beng, said in a statement. “This rare placemaking opportunity augments our role in rejuvenating the Singapore River precinct and aligns with our enhancement strategy to unlock the latent value of our matured assets.”

Sherman Kwek speaking to the media in Singapore.


Nicky Loh/Bloomberg

The redevelopment of Central Mall and Central Square is the latest project City Developments is undertaking to rejuvenate the central business district. In partnership with CapitaLand, City Developments is redeveloping the site of the former Liang Court commercial complex into a mixed-used residential, commercial, hotel and serviced apartment development. The duo sold 83% of the 696-unit Canninghill Piers, which would be the tallest residential structure along the Singapore River when completed, after launching the project last month.   

City Developments is among the most active developers of luxury homes in the CBD, having completed the construction of The Sail @ Marina Bay residential skyscraper in 2008, one of the first residential buildings in the new Singapore downtown. The company is also redeveloping the former Fuji Xerox Towers in the Tanjong Pagar district into a mixed-use property with office, retail, residential and serviced apartment components.

The strong demand for luxury homes in the CBD has also attracted other developers, with a consortium led by Chip Eng Seng and SingHaiyi—both controlled by billionaire couple Gordon & Celine Tang—agreeing on Friday to buy Peace Centre/Peace Mansion near the Orchard Road shopping district for S$650 million. The consortium plans to transform the 7,118 square meter site into a mixed-used commercial and residential development, subject to regulatory approvals.

The transaction comes on the heels of the acquisition in May of Maxwell House by Chip Eng Seng, SingHaiyi and Chuan Investments for S$276.8 million. The property in Tanjong Pagar will also be redeveloped into a mixed-use commercial and residential project, subject to regulatory approvals.

Sales of older properties for redevelopment have been picking up in Singapore, fueled by rising demand for housing, low interest rates and limited supply of land across the city-state. In October, a joint venture between UOL Group and Singapore Land—both controlled by billionaire banker and developer Wee Cho Yaw—won the auction for the Watten Estate Condominium in the prime Bukit Timah district in western Singapore with a bid of S$550.80 million.

An aerial view of Central Mall and Central Square.


Courtesy of City Developments