Lippo unit taps into upside potential of land values on Singapore's resort island Hongkong Chinese, a unit of Indonesian businessman Mochtar Riady's Lippo Group, has agreed to buy two parcels of land on Singapore's resort island of Sentosa for S$234.7 million (HK$1.15 billion). The company said it has won the tender for the two sites with a combined area of 22,221 square metres, in an announcement to the Hong Kong stock exchange. The sites can be developed into 150 four-storey luxury houses with a gross floor area of about 287,037 square feet. That will value the purchase at S$743 per square foot. 'The price is reasonable considering the upside potential of the resort island,' Savills (Singapore) managing director Michael Ng said. A casino-resort has been proposed for development on Sentosa and Mr Ng estimates that the developer will have to sell the project at between S$1,100 and S$1,200 per square foot to break even. Last week, 100 units of the Coast, a new luxury project near the Sentosa site that Hongkong Chinese has just bought, were sold at S$1,500 to S$1,600 per square foot. Houses on Sentosa are leased at S$6 to S$7 per square foot per month, Mr Ng said. 'To enhance its asset portfolio, the group continues with its quest to acquire quality property interests in Singapore as the market has been performing well in the past year,' Hongkong Chinese said. Singapore's average home prices have risen 10 per cent with some prime residential projects jumping as much as 30 per cent over the past 12 months, Mr Ng said. He said residential prices are likely to continue to rise as strong economic growth fuels demand for housing. The Singapore government expects economic growth of as much as 7.5 per cent this year, up from 6.4 per cent last year. The city state plans to spend S$8 billion to transform Sentosa into a leading tourist destination by 2010. The plan includes building the island's first casino-resort. The government aims to double the number of visitors to Singapore to 17 million by 2015. Lippo, which controls three Hong Kong-listed units including Hongkong Chinese, engages in property investment and development as well as financial services including fund management, underwriting, corporate finance, securities broking and banking. Shares of Hongkong Chinese closed unchanged at HK$1.07 yesterday after their trading resumed following suspension on Friday. Lippo China Resources shares were down 5.29 per cent at 19.7 HK cents while Lippo rose 0.75 per cent to HK$2.68 as their trading resumed yesterday as well. Hongkong Chinese is 72.26 per cent owned by Lippo China Resources, which is in turn 71.13 per cent owned by Lippo.