HEETON Holdings, which has traditionally developed residential properties in Singapore's prime districts, is shifting its attention towards the mass market segment.
"We are prepared to look at Government Land Sales land, or even executive condominiums for that matter," said Danny Low, chief operating officer and executive director at Heeton Holdings.
"Normally, we don't go into these areas but, lately, we feel that it may be a safer bet," said Mr Low, who added that it has become increasingly difficult to move units at high-end projects.
This is due to both current economic conditions, and the various rounds of cooling measures, in particular the imposition of the Total Debt Servicing Ratio, said Mr Low.
These factors played a significant part in the pricing of their latest project Onze@Tanjong Pagar.
The 18-storey building, which will be erected where El Centro now stands, features 56 residential and 13 commercial units.
Prices for residential units at the freehold development start from $2,000 per square foot (psf) while smaller units range from $2,200 to $2,500 psf.
The one-room units range from 506 sq ft to 570 sq ft while the larger three-bedroom units are 1,044 sq ft to 1,141 sq ft.
This prices the units between $1.2 million and $2.6 million, said Mr Low.
"When we set the price at $1.2 million, we are thinking of the budget, because we don't want to stretch (buyers). Once you hit $1.8 to $1.9 million, it's a bit more dicey. Fortunately, our layout is good and people are willing to park $2.5 million!" he said.
The development also features seven shops and six restaurants. Prices for the commercial units run from $5,800 to $7,500 psf.
When it is completed, Onze@Tanjong Pagar will be transferred out of Heeton's investment portfolio.
El Centro was considered an investment property for the company, whose turnover comprises rental income from investment properties and proceeds from development projects.
The group is also looking to growing its hospitality segment from the current 245 room keys to 1,500 by FY2016. Significant targeted destinations include London, Sydney, and various popular tourist destinations in Thailand.
Mr Low said the company intends to own six to 10 hotels. Heeton is looking to take possession of two hotels - one in Thailand and another in London - by the beginning of next year.
Also part of the group's three-year growth plan, which was unveiled this month, the company is looking for long-term opportunities in key industrial and commercial zones in South-east Asia such as Vietnam and Singapore.
It will also add other asset classes such as community amenities to its current portfolio.
The group had earlier announced that it will be venturing into Vietnam via a joint venture with Habitat Commercial Group to develop a dormitory and amenities project.
Together, both companies intend to invest up to $25 million for the development of the property, and other joint projects in Vietnam, within the next three years.
The group plans to increase the proportion of its development and investment properties overseas significantly, to around 30 per cent by FY2016.
Source from Business Times