Bukit Sembawang looks to buy Kallang Distripark land for new waterfront homes and park at $196.04 mil

Property developer Bukit Sembawang Estates Ltd is proposing to acquire a 5.1ha portion of the 13ha Kallang Distripark site for around $196.04 million, under a conditional put-and-call agreement.

It plans to develop a non-landed, leasehold private residential development with commercial space on the first storey, as well as a 2ha public park, 15m-wide waterfront promenade, and new roads, the Singapore-listed developer said in a bourse filing on the evening of Oct 16.

Bounded by the Kallang River and Pelton Canal, the site Bukit Sembawang is looking to purchase measures roughly 51,000 sq m (about 548,959 sq ft) and includes a 24,905 sq m (268,075 sq ft) housing plot that has about 41 years left on its 99-year lease, expiring in 2067.

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The total land cost for the project is expected to be around $1.01 billion, comprising the purchase price of $196.04 million, the specified land betterment charges, and the lease upgrade premium for a fresh 99-year lease.

The condo project, with commercial first-storey use, will have a permissible gross floor area of about 74,707 sq m (804,139 sq ft) with a gross plot ratio of 3.0, subject to approvals from the authorities.

In August, analysts estimated that this plot could yield about 600 to 800 condo units, The Straits Times (ST) reported then.

Bukit Sembawang said in its Oct 16 bourse filing that the proposed transaction will "strengthen and diversify its property development portfolio, complementing its established landed residential developments with a sizeable non-landed residential project".

Its major landed projects have included Luxus Hills, which recently released its latest Phase 10 of terraced homes, Seletar Hills Estate, and Sembawang Hills Estate — totalling thousands of houses.

The Kallang Distripark land is located in the city-fringe Kallang area, about 5km from the city centre, and is near the Geylang Bahru and Kallang MRT stations, as well as major expressways, which provides connectivity to CBD and other parts of Singapore.

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The proposed public park and waterfront promenade are also expected to enhance the overall living environment and appeal of the development, Bukit Sembawang added.

As a condition of the land acquisition, the developer will design, construct, complete and maintain works relating to the public park, waterfront promenade and road infrastructures. It will also demolish certain warehouses, buildings and/or structures.

Lee group of companies

Bukit Sembawang’s subsidiaries have entered into a conditional put and call option agreement with the seller, Tropical Warehousing Co.

The developer will seek its shareholders’ approval for the proposed transaction at an upcoming extraordinary general meeting (EGM).

The seller is owned by members of the Lee group of companies — including Lee Rubber Company, Kallang Development, and Selat — built by entrepreneur and philanthropist Lee Kong Chian, who was popularly known as the "Rubber and Pineapple King".

Some of these entities are substantial shareholders of Bukit Sembawang, through both direct and deemed interests, and will thus abstain from voting on the proposed acquisition at the EGM.

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Lee Chien Shih, grandson of Lee Kong Chian, will likewise abstain from voting.

He is non-executive director of the real estate developer, a member of its board's nominating, remuneration and project development committees, holds a 0.226% stake in Bukit Sembawang, and is also a director of Lee Rubber Company.

The exercise of the call option by the buyer or the put option by the seller is subject to conditions precedent, including shareholder approval at the EGM and in-principle approval from the Singapore Land Authority to grant a fresh 99-year lease in exchange for the surrender of the existing head lease.

Plans for Kallang Distripark

URA proposed in August to amend its Master Plan to convert the entire privately-owned Kallang Distripark industrial and warehouse site into a new residential estate that could yield an estimated 2,250 to 2,550 condo units in total.

That would involve carving up the 13ha site into three private housing plots, a 1.8ha reserve site, a new 2ha neighbourhood park, and to add roads for future residents and visitors to access the area.

Besides the leasehold plot that Bukit Sembawang is looking to acquire, the other housing plots sit largely on freehold land and are meant solely for residential use, without a commercial component.

ST noted that the larger site, along Kallang Bahru, measures about 3.6ha and could produce about 1,200 condo units. The other one abuts Pelton Canal and is about 1.6ha, potentially yielding 450 to 550 new homes.

Kallang Distripark originally started as a rubber processing and manufacturing plant linked to the Lee Rubber Company.

Over the decades, the industrial space transitioned into a warehouse area. It includes three octagonal structures, used as rubber warehouses, known as the Lee Rubber Godowns.

URA in August said it had engaged the owner on potentially retaining one of those warehouses as a heritage marker within the proposed park, according to the agency's responses to ST.

As early as 2003, URA had zoned the area for housing, and in 2017 highlighted the site in broader plans to transform the Kallang River corridor into a vibrant lifestyle and recreation precinct.

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