Bungalow developer confident of robust demand

Mar 28, 2011 - PropertyGuru.com.sg

In Singapore, a Good Class Bungalow (GCBs) is uncommon but even less ordinary is the story of Mr. George Lim, who has become a prime developer of these high-class homes.

Since 2006, Mr. Lim, 59, has redeveloped and sold seven bungalows, worth a total of S$145 million.

Recently, he made the headlines after paying S$61.4 million for a 41,852 sq ft site in Leedon Park. Following his typical strategy, he will demolish the bungalow and redevelop the area with two GCBs.

Mr. Lim maintains that his venture into property was not planned but “happened along the way”, after he sold his engineering firm for approximately S$12 million, which helped him purchase an S$18 million bungalow in Belmont Road. He stayed there for three years before subdividing the 48,000 sq ft plot and building three houses

Mr. Lim noted that his confidence in home value is based on land scarcity.

“My father bought our first house in Kembangan for S$12,000, improved on it, and sold it for more than S$60,000 after 10 years... I look at this and see that property investment has fantastic growth. There’s no way you can put money into a savings account and get those kind of returns.”

Mr. Lim owns three other GCBs, located in Binjai Park, Second Avenue and Leedon Park. All three houses will receive a green mark rating, as he plans to build homes which include environmentally friendly features, such as solar panels.

The bungalows in Leedon Park and Binjai Park are scheduled to be launched in June. Mr. Lim expects to sell them for more than S$40 million each, a new unit price record of approximately S$2,500 psf.

His success, however, is also coupled with risks. Mr. Lim revealed that he is 50 percent leveraged based on the property costs.

Mr. Lim believes that the current measures, such as higher sellers’ stamp duties (SSD) are not an issue in this market. He is confident that demand will continue to increase along with the growing number of rich people.

“I will put a price there and if somebody thinks it's worth buying, then I will sell it. My intention is to hold it as an investment for the long term but the moment I sell it, I will look for another plot to buy, so that I stay in touch with the property market,” Mr. Lim added.

GCBs are among Singapore’s most luxurious homes. There are approximately 2,400 of such homes in 39 gazetted regions such as Dalvey, Nassim and Tanglin. — which were sold for a total of S$33 million in 2006.