Tag Archives: luxury condos

Super Penthouse in Singapore for S$100M

Who will be buying the most expensive apartment or “bungalow in the sky” in Singapore? The asking price for a new three-storey Singapore penthouse, complete with a private pool on the 64th floor, has reached more than $100 million. This amount of money can well easily buy one a few good-class bungalows (GCBs) in District 9/10.

The Wallich Residence’s penthouse is in the tallest building in Singapore, the island of well-heeled stability that attracts the super-rich from its less-developed South-east Asian neighbours, as well as multi-millionaires from mainland China.

It will test the endurance of demand for luxury property in the city-state – the part of the market that has taken the biggest hit from measures aimed at cooling down prices in recent years.

Prices for luxury homes in Singapore have fallen 15-20 % from a 2013 peak. However the recent events has cause optimism among market insiders to foresee a turnaround – at least at the top end of the market – and is forecasting a 3-5 % increase in luxury prices this year, citing demand from both locals and foreigners who feel the market is bottoming out.

The volume of transactions in the first four months of the year in Singapore’s core central region was 35% higher than in the same period last year. The Core Central Region includes the popular areas among wealthy foreigners — the Orchard Road shopping area and Sentosa island.

Buying by foreigners has picked up since the start of the year at the developer’s high-end Leedon Residence project, near the 150-year-old Singapore Botanic Gardens. GuocoLand is part of Malaysian conglomerate Hong Leong Group, headed by billionaire Quek Leng Chan.

The recent tightening of property market controls in places like Hong Kong and Australia played a part in attracting foreign demand to Singapore’s luxury property this year. While prices in Hong Kong tripled and Sydney’s doubled over the past decade, Singapore prices rose just 29 %.

City Developments (CDL), one of the largest Singapore developers, also said the average sales price at its high-end Gramercy Park project has risen to more than $2,800 per sq ft in recent months, up 8 % from a year ago, and foreign buyers accounted for three-quarters of the project so far.

One may note though that the Singapore’s residential market has fallen for 15 straight quarters to log its longest losing streak since official records began in 1975. Analysts expect a bottoming of prices in the year 2017.

Singapore introduced property price cooling measures to curb speculation for the past 7 years. Some measures were relaxed slightly this year but the authorities announced that there would be no more rolling back of the remaining measures for now.

More information of the Penthouse can be found at the following link.

Click to access Wallich_PentHse.pdf

Bloomberg: Blackstone bets on Singapore luxury property market

Blackstone Group LP’s Stephen Schwarzman, who correctly bet on a U.S. housing recovery, is now making a similar wager on Singapore’s luxury property market.

Singapore’s success in using administrative measures to cool its real estate market — luxury prices have fallen about 20 percent in the past two years while Hong Kong’s have kept rising — means the restrictions are likely to get lifted, the Blackstone chairman said last week. His firm has been investing in high-end developments over the past four months.

Property has become Blackstone’s biggest profit driver as record-low interest rates and a U.S. economic recovery pushed prices higher. With Singapore poised to hold elections in the next two years, Schwarzman’s call on the luxury segment is a timely one, property analysts said.

“Historically, the government wants to please people before elections,” said Alice Tan, Singapore-based head of research and consultancy at Knight Frank LLP. “They would not want to be seen as being too punitive, especially for an area like property, which Singaporeans like to own as an asset class.”

Blackstone, the world’s biggest private-equity fund, bought a 10-story apartment block and another 18 units in Singapore’s prime residential district since December. A group of Singapore investors in January bought 16 units at 111 Emerald Hill, a condominium project off the Orchard Road shopping strip.

Price Swoon

Starting in 2009, Singapore officials moved to stem a surge in the property market that was fueling discontent in the city-state of 5.5 million people. The highest taxes of as much as 15 percent of the purchase price were imposed on foreigners buying property in the island city.

As those measures took effect, prices of luxury homes — defined as more than 1,500 square foot in size and costing above S$2,400 ($1,744) per square foot — have dropped at least 20 percent since the start of 2013, the Real Estate Developers’ Association of Singapore estimates. Knight Frank has lately been fielding inquiries from funds and high-net-worth investors keen to purchase as developers with unsold stock are willing to cut prices, she said, adding that prices of prime units could rise 5 percent to 8 percent over the next three years.

The curbs “led to big drops in the value of certain properties and we bought after the decline happened — quite recently actually, within the last year — and we believe over time those restrictions will be terminated,” Schwarzman said on March 28 in an interview on the sidelines of the Boao Forum for Asia in Hainan, China.

Blackstone Bargain

Blackstone paid about S$164 million for the 34-unit block at 21 Anderson, within a short distance from Orchard Road, and S$83 million for the 18 units at Paterson Suites, a person familiar with the transactions said in February. Paterson Suites is a five-minute drive to Orchard and 10 minutes away from the office district.

“The smart money has started to come back,” said Donald Han, Singapore-based managing director at real estate broker Chestertons. “We are at rock bottom prices on the luxury housing market.”

The U.S. buyout giant is getting a bargain even after paying the extra stamp duty imposed on foreigners in 2011, said Alan Cheong, a director at property broker Savills Plc. It paid about S$2,000 per square foot based on the acquisition price, Cheong estimated.

“If you look at luxury segment prices, any transaction done below S$2,000 per square foot is a steal even if you have to pay the extra 15 percent stamp duty,” said Singapore-based Cheong. “Prime London property is going for S$3,500 per square foot.”

Monitoring Market

In the last decade, the average price of luxury homes in Singapore has been more than S$2,000, Cheong said. Average luxury home prices on Hong Kong Island, the most expensive of the city’s three territories, were at least HK$17,097 a square foot, or S$3,031, last year.

A representative for Blackstone declined to comment on the prices it paid.

Home prices fell for a sixth consecutive quarter, the longest losing streak in more than a decade. Prices in Singapore’s prime districts, with a high proportion of luxury properties, declined 0.6 percent in the first quarter.

While property restrictions have dented demand for high-end housing, the city-state retained its ranking as the most expensive city to buy a luxury home after Hong Kong in Asia, according to a 2015 Knight Frank wealth report.

Finance Minister Tharman Shanmugaratnam said in his budget speech on Feb. 23 that the government will continue to monitor the property market and adjust measures when necessary.

‘Deep Value’

Singapore is home to the most millionaires per capita in Asia, according to a study by the Boston Consulting Group last year. Globally, only Qatar and Switzerland have higher millionaire density, the report showed.

Blackstone is moving to capitalize on that wealth. The firm has also entered into a deal with the country’s second-largest developer, City Developments Ltd., to take part in a financing for a luxury hotel, retail and residential development on Sentosa island. The deal would give Blackstone a fixed 5 percent coupon for five years and rights to any proceeds from the sale of the residential units.

“Blackstone seems to look for distressed assets and deep value,” said Vikrant Pandey, an analyst with UOB Kay-Hian Pte in Singapore. “In the U.S. it lapped up mass market apartments for their rental yields and deep value. In Singapore the luxury segment is offering deep value compared to mass market.”


CCR subsales includes a bumper S$3M gain

SINGAPORE – The most profitable subsale transaction in the first half of this year in the Core Central Region (CCR) yielded a gain of about S$3 million.

It involves a low-floor unit at Goodwood Residence in Bukit Timah Road purchased from developer GuocoLand in April 2010 at S$8.5 million or S$1,815 per square foot and subsold at S$11.5 million or S$2,456 psf in May this year.

The transaction also produced the highest percentage gain for a subsale deal – 35 per cent – in the period, shows a caveat analysis by Ngee Ann Polytechnic’s School of Design & Environment.

Subsales are secondary market transactions of units in projects that have yet to receive Certificate of Statutory Completion (CSC) and where the titles for all the units have yet to be issued.

Subsales – tracked as a barometer of the level of speculative activity in the property market – have slowed in the private housing segment in recent years, thanks to cooling measures such as the seller’s stamp duty (SSD), aimed at deterring short-term trading of residential property, as well as the June 2013 total debt servicing ratio framework that banks have to take into account when granting new property loans to people.

Ngee Ann’s analysis also showed that subsale gains of about S$500,000-plus each were generated by two high-floor units at Centennia Suites in Kim Seng Road. They were acquired in separate transactions in March 2010 and divested in the subsale market earlier this year.

A quarter of the non-landed private homes in CCR – which covers the traditional prime districts 9, 10 and 11, the Downtown Core planning area and Sentosa – that changed hands in the subsale market in H1 resulted in a loss for the sellers.

Quantum-wise, the biggest loss of S$800,000 was chalked up by an apartment on a low floor of the Waterscape at Cavenagh condo.

Its owner bought it from the developer back in June 2010 for S$3.9 million or S$2,059 psf and offloaded it in May this year at S$3.1 million (S$1,636 psf).

At the Reignwood Hamilton Scotts, a mid-floor unit acquired in September 2009 at S$9.13 million was subsold in May this year for S$8.5 million, producing a loss of over S$600,000.

In the Dunearn Road area, an apartment at The Glyndebourne picked up from the developer at S$3.2 million in November 2010 changed hands in April at S$2.8 million – a 13 per cent loss. Subsales of four units in Robinson Suites in April were in the red to the tune of S$300,000-plus each or about 22-23 per cent; the units were bought from the developer in December 2010.

In Outside Central Region, where mass market condos are located, the most profitable subsale in H1 – with a S$746,000 gain – was for a unit at Hundred Trees in West Coast Drive.

Its owner paid S$1.39 million for the low-floor in October 2009 and divested it in the subsale market this March at S$2.14 million. Percentage wise, the gain was 54 per cent.

In all, there were seven subsale transactions at Hundred Trees in H1, all profitable.

At the Tree House in Chestnut Avenue, the owner of a high-floor unit who paid S$1.13 million in May 2010, found a buyer for the unit at S$1.66 million this May.

Slightly over 97 per cent of the 142 subsales in OCR were profitable.

The four deals that chalked up a loss involved units at Kovan Regency (about S$89,200), Seastrand (S$46,200), Ripple Bay (S$5,500) and Euhabitat (S$1,700).

Profit or loss was calculated by comparing the H1 subsale price for the unit against the price at which the unit had previously changed hands; SSD was also factored in where applicable but not any other costs.

The current subdued market provides an attractive hunting ground for first-time buyers. As Ong Choon Fah, DTZ SE Asia chief operating officer, observed: “The savvy have started to look for good deals from motivated sellers, including those who bought from developers.

The trend of subsale transactions involving a relatively long holding period is set to continue.”

– See more at: http://business.asiaone.com/news/most-profitable-ccr-subsale-h1-yields-s3m-gain#sthash.1CjHAJd9.dpuf

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