Koon to develop executive condominium at Pasir Ris

Participation in the joint venture company with a 15% stake seen to enhance the Group’s diversified business model.

Koon Holdings Limited, (“Koon”), one of Singapore’s leading infrastructure construction and precast specialists, is pleased to announced that its subsidiary, GPS Alliance Development & Investment Pte Ltd (“GPS Alliance Development and Investment”) has entered into a joint venture agreement to develop an Executive Condominium (“EC”) at Pasir Ris Drive 3 / Pasir Ris Link.

Joint Venture Company to Develop Executive Condominium at Pasir Ris
The structure of the Joint Venture Company (“JVC”) is EVIA Real Estate Pte Ltd (34%), Maxdin Pte Ltd (30%), Ho Lee Group Pte Ltd (21%) and GPS Alliance Development and Investment (15%). Maxdin Pte Ltd and Ho Lee Group Pte Ltd have been awarded the tender for the land parcel located at Pasir Ris Drive 3 / Pasir Ris Link at the tender price of S$122.2 million by the Housing & Development Board (“HDB”) for an EC housing development. And according to the HDB, the tender for this EC site at Pasir Ris has attracted a high number of developers with a total of 11 bidders. The size of the EC site is approximately 18,500 square metres with estimated dwelling units of 400.

Commenting on the property development joint venture, Mr Tan Thiam Hee, Managing Director and Chief Executive Officer of Koon said, “The recent move by the government to raise the income ceiling for those eligible for EC housing has further boosted the demand for EC. Other than this site, there is no other supply of new EC projects in the Pasir Ris area in the immediate future. Demand is likely to come from the potential upgraders currently living in Pasir Ris and Tampines new towns and those working in the eastern part of Singapore. In view of these trends, we have decided to participate in this landmark residential property development. In addition, our real estate agency unit, GPS Alliance, will be responsible for the marketing strategy and sales of this residential development.”

The Group will finance its equity shareholding stake in the JVC by internal funds and it is not expected to materially affect the Group’s performance for the financial year ending 31 December 2011.

Business Synergy from Koon’s Real Estate Agency Unit
Since acquiring a majority stake in GPS Alliance Holdings Pte. Ltd. (“GPS Alliance”), a premier real estate agency, the Group has been able to explore more property development opportunities by leveraging on its knowledge and extensive network in Singapore’s real estate market.

Mr Tan added, “With their niche strengths, the management team of GPS Alliance, Mr Jeffrey Hong and Mr Dennis Yong, has been instrumental in constructing this deal together, according to a Koon report.

Reinforcing our overall business strategy, both Jeffrey and Dennis will build on this momentum to tap suitable property development opportunities locally and overseas. We look forward to create new business synergies for our related business units through this property development project.”

Enhancement to the Group’s diversified business model
Following its foray into precast market in March 2010, Koon has progressively transformed its business model to diversify its revenue base and generate more recurring income.

Mr Tan concluded, “Our series of acquisitions over the past two years has provided us with a strong foundation to grow our product and service offerings beyond our core expertise in civil engineering. With the inclusion of this residential property development project, we are on track to build sustainable growth for the Group.”