Heeton looks to expanding regionally

Singapore-listed property development and investment firm Heeton Holdings is seeking to further regionalise its business over the next three years.

The company’s objectives include diversifying its earnings from beyond Singapore to tap opportunities in emerging economies amid a challenging property market in the city-state.

[email protected] Pagar is Heeton Holdings’ latest project on the market.

The mixed development in the city centre — comprising 56 residential units and 13 commercial shops — will be launched for sale on Thursday.

Buyers will have to pay S$1.2 million to S$2.6 million for a residential unit at [email protected] Pagar.

Half of the 56 units will be 3-bedders while the remaining are 1-bedroom units. The size of units will range from 506 square feet to 1,141 square feet.

The development is expected to be completed by the end of March 2018.

Heeton said the average price for the apartments is S$2,250 per square foot while a commercial unit will go for about S$6,300psf.

The firm hopes to move units by giving an early bird discount of over 20 per cent. Heeton said its sales agents have thus far collected about 28 cheques from keen buyers of units at [email protected] Pagar.

Demand for luxury homes has been slow in the past years and cooling measures such as additional buyer’s stamp duties and loan curbs such as the Total Debt Servicing Ratio (TDSR) framework did not help.

Danny Low, chief operating officer of Heeton Holdings, said: “TDSR really… is like a nail in the coffin. It will still be a very tough environment for developers to make a very good margin compared to years when (the margin) easily (reached) 20 per cent and above. It will be less than that now.”

Mr Low said the firm aims to double its market capitalisation in the next five years and is actively seeking opportunities in the Southeast region.

Heeton has a market capitalisation of S$177.3 million as of September 4.

Mr Low said: “We are looking at (places) outside the country…especially in Thailand, Vietnam, and pockets of investment in maybe London or Sydney.

“In the next 3 to 5 years, we plan to pare down our core revenue business in Singapore from 100 per cent to about 70 per cent, and the region, around 30 per cent. We (have) already signed a MOU (Memorandum of Understanding) to develop a mini township in Vietnam’s Ho Chi Minh City.”

In Singapore, Heeton expects to continue to invest in attractive sites and also in the executive condominium (EC) segment that is gaining in popularity among home buyers.

Heeton said it expects to bid for EC sites under the government land sales programme in the coming months.

Five EC sites have been slated for sale for the second half of this year. Analysts are expecting keen competition for them.

Ku Swee Yong, CEO of International Property Advisor, said: The last EC tender exercise, even though three plots of land were out for tender at the same time, the Jurong one was heavily over-bidded (and) the other two plots still had a significant number of bidders.

“The interest from the developers, the cash hoard of the developers is still strong, interest expenses from bank loans for government land sales are still very reasonable, so developers are still expecting to make a good profit for their shareholders going into the EC segment.”

Some analysts said aggressive bidding for sites and strong demand for ECs could potentially drive prices up by 10 per cent in the next 12 months.

Source : Channel NewsAsia – 4 Aug 2013