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Another record sale at Sentosa Cove

Record price set for Sentosa Cove bungalow; GCB in Cluny Hill goes for $1,841 psf but overall volumes dip.

Tue, Sep 28, 2010
The Business Times

By Kalpana Rashiwala

THOSE looking to buy the most luxurious bungalows in Singapore may not have turned up in huge numbers this past quarter, but they have signed under impressive figures on their cheque-books.

Another record price has been set on Sentosa Cove.

This time a prime seafronting bungalow along Ocean Drive on a 7,690 sq ft plot area has been sold for $2,536 per square foot (psf) on land area.

Peek into Sentosa Cove Click on thumbnail to view

This surpassed the earlier record of $2,403 psf posted just in May this year for a bungalow on Paradise Island; however that property has a bigger land area of about 14,983 sq ft resulting in a much higher absolute price of $36 million.

The latest deal, which took place last month, amounted to $19.5 million. The bungalow is near The Coast at Sentosa Cove condo.

Its buyer is understood to be Indian citizen Dalip Kumar Seth, the boss of Sunrise & Co Pte Ltd, a sporting goods wholesaler/distributor which represents the Yonex and Mikasa brands. He is a Singapore permanent resident.

Near record sale

On the mainland too, the Good Class Bungalow (GCB) market saw a near-record price last month.

A house at Cluny Hill was sold for $28 million or $1,841 psf based on its land area of 15,210 psf. On a psf basis, this is believed to be the second highest price ever achieved in the GCB market, surpased only by the $1,899 psf that was recorded in 2007 for 32H Nassim Road.

However, that was for a smaller land area of 13,423 sq ft.

GCBs are an exclusive housing form on mainland Singapore governed by stringent planning requirements.

There are only about 2,400 such bungalows in Singapore's 39 gazetted GCB Areas. Typically the minimum land area of a GCB is 1,400 sq metres (15,069 sq ft).

However, when GCB Areas were gazetted in 1980, there were some existing sites within these areas smaller than 1,400 sq m.

They are still considered GCBs due their surrounding environment and are bound by the other planning requirements for GCBs such as a maximum two-storey height.

Market watchers note that the $1,841 psf for the latest deal at Cluny Hill surpasses the $1,800 psf which a GCB at Nassim Road sold for in April this year.

That property is on 24,187 sq ft land area, reflecting an absolute price of $43.53 million.

Among the other major GCB deals in Q3 are a $21 million (about $1,300 psf) deal at Swettenham Green; the buyer is understood to be plastic surgeon Woffles Wu.

There was a also a transaction at Chatsworth Road for $25 million or $1,499 psf. The seller is understood to be Pacific Asset Management's managing director and chief investment officer Ho Tian Yee.

CB Richard Ellis' analysis shows that the average price for GCBs sold so far this year is $1,050 psf, about 26 per cent higher than the $831 psf for GCB transactions for the whole of 2009.

Rising prices have widened the gap in expectations between buyers and sellers and slowed down demand this quarter, say some industry players like CB Richard Ellis director (luxury homes) Douglas Wong.

Based on the property consultancy's analysis of URA Realis caveats captured upto Sept 23, a total 16 GCB deals have been done this quarter for a total $253.4 million - down from 36 transactions for $777.7 million in Q2 and 31 deals at $516.2 million in Q1.

The final number for Q3 may be higher since the quarter is not over and more caveats may be filed over the next few weeks.

Weaker volume

Despite the weaker volume this quarter, the 83 deals clinched year-to-date have a total sale value of nearly $1.55 billion - just 10 per cent shy of the record $1.72 billion for the whole of last year, when there were 109 deals.

CBRE believes the market is on track to achieving about 100-120 GCB transactions amounting to $1.8 billion for full-year 2010.

Related links: » $36m home not a problem » Luxury hotspots to re-emerge

'Demand for GCBs has slowed in the third quarter primarily because the price expectations between owners and buyers have widened. On one hand, owners can afford to hold as they're not in a hurry to sell; on the other, buyers can afford to purchase but are not prepared to pay what the owners are asking,' says Mr Wong.

This trend had set in even before the government announced measures to cool the property market on August 30 and had no direct impact on the GCB market, he reckons.

Agreeing, RealStar Premier Property managing director William Wong says: 'Reducing the maximum loan-to-valuation from 80 per cent to 70 per cent (for those already servicing existing mortgages) doesn't affect buyers in this segment as most would borrow around 50-70 per cent - if they borrow at all.'

Another cooling measure - extending the 3 per cent sellers' stamp duty to the sale of properties within three years of purchase - also will only have a marginal impact as most bungalow buyers purchase with a mid- to long-term perspective, he adds.

Stand-off phase

'Right now we're facing another stand-off phase which usually happens whenever there's a new announcement.

'Some bungalow buyers are waiting and hoping to see a drop in price but most sellers are not reducing. Instead quite a number have actually revised their prices upwards lately in view of the buoyant economy, coupled with a better-than-expected stock market performance,' Mr Wong says.

This price gap will probably mean fewer transactions in the next two to three months, he reckons. Giving a similar take, CBRE's Mr Wong predicts relatively slow sales until perhaps early next year, by which time pent-up demand would have built up.

'That's when we're likely to see an increase in GCB transactions again.'

This article was first published in The Business Times.

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$36m home not a problem

Wealthy Chinese nationals find prices in S'pore a bargain

Tue, Jun 22, 2010
The Straits Times

By Goh Chin Lian and Shuli Sudderuddin

When real estate agent Jasmine Png told her client from China that the Sentosa Cove property he was eyeing was about $15 million, he did a double take.

He asked her to repeat the amount.

'Then he asked if it was haunted because he thought it was too cheap,' said Ms Png.

He is not the only one.

The $36 million home Click on thumbnail to view

Most high net worth Chinese nationals feel that Sentosa Cove properties are great value for money, costing half of what similar homes command in other cities like Hong Kong and London.

Ultra-rich Chinese nationals buying Singapore property made headlines this month when a Chinese paid $36 million for a luxury home on Paradise Island in Sentosa Cove.

It is probably the most expensive bungalow in Sentosa Cove in terms of the total amount paid and its per sq ft price.

At 14,983 sq ft and a built-up area of about 17,000 sq ft, the 2 1/2 storey bungalow has one of the larger land areas in the development.

The registered owner, a man named Shen Bin, is a Singapore permanent resident. The Straits Times understands he is in his early 30s and frequently travels in and out of Singapore.

UOB economist Jimmy Koh said that luxury property in Singapore has become an international product on a par with luxury homes in big cities like Hong Kong, but costing less.

'It's similar to brands like Prada and Louis Vuitton, all around the world the standard of the product is the same. The difference in Singapore compared to other places like Hong Kong and New York is that the property here is about 50 per cent cheaper.'

A luxury bungalow in Singapore costs about $2,000 psf but can cost $2,800 to $3,000 psf in Hong Kong.

Mr Koh added that the number of Chinese nationals entering the property market is expected to rise.

Figures from real estate firm DTZ bear this out.

Among foreign nationalities looking for homes here, the share of mainland Chinese rose from 15 per cent in the fourth quarter of last year to 17 per cent in the first quarter of this year.

Twenty-one per cent of these Chinese bought houses in the prime districts of 9 to 11, the Central Business District and Sentosa, said DTZ.

Real estate agents said that the wealthy Chinese are usually businessmen from Beijing and Shanghai with a few factories in China or an office here.

Some buy property in Singapore even if it has a 99-year lease because they want their children to go to government or international schools here in order to benefit from an English- and Chinese- speaking environment.

Said Mr Markus Tay, vice-president for sales and marketing in Luxe Group, which specialises mainly in luxury property: 'Chinese nationals live here mainly so that their children can go to school here. Most of the children are quite young, at primary school age.'

This was one reason China-born action star Jet Li bought a 22,723 sq ft bungalow at Binjai Rise, in Bukit Timah, for $19.8 million last year.

He told reporters in Shanghai last Monday that he took up Singapore citizenship so that his two daughters could get a Chinese and English education here.

He chose Singapore over China and the United States where he had lived for many years, and Australia and Switzerland. His children attend the Singapore American School.

The Sunday Times understands that his family moved into his Binjai Rise home - which comes with a swimming pool and whose balcony is decorated with a pair of deer statues with huge antlers - about five months ago, together with at least three maids and a driver.

Peek into Sentosa Cove Click on thumbnail to view

Other rich Chinese nationals who bought property here just want a place for a weekend getaway, in addition to houses they own in cities like London and Hong Kong.

They typically buy more than one property. Some own homes in the East Coast close to their children's schools - Tao Nan School is said to be a popular choice - as well as at the exclusive Sentosa Cove.

Others own one or more landed houses in Sentosa Cove, as well as one or more condominium units there. They can rent out a three-bedroom apartment for $5,500 a month.

They consider top-end Singapore property facing the sea, like Sentosa Cove, a good quality international product - at half the price of similar properties in China.

Adding to the attractiveness of buying a property here is a carrot dangled by the Singapore Government: A foreigner who buys a Sentosa Cove bungalow and places at least another $3 million in financial assets here can get on the fast track to becoming a Singapore permanent resident.

The Financial Investor Scheme, run by the Monetary Authority of Singapore (MAS), is targeted at foreigners with at least $20 million in net personal assets.

The MAS declined to disclose the number of people who have applied for the scheme or a breakdown by nationality.

But Mr Jason Yeo, general manager of Sentosa Cove Resort Management, the site manager of Sentosa Cove, was reported earlier this year as saying that its 3,000-plus residents comprise about 60 per cent foreigners and 40 per cent local people.

He also said that the top five of 22 nationalities living there are Singaporeans, Australians, Britons, Germans and Chinese.

Real estate agents said the Chinese nationals prefer to keep a low profile and are vague about what they actually do for a living.

They may dress simply - such as a polo shirt and jeans for men - but have specific preferences.

At Sentosa Cove, for instance, they want the entrance of their house to open up to a spacious living room instead of a corridor.

Mr Chris Koh, a director at Dennis Wee Group, said they also look for unblocked views as they do not get them in places like Shanghai.

He added: 'For those buying condominiums, they enjoy communal facilities and they always ask about security features.'

Many opt for regular, squarish shaped houses without odd angles. Older customers are concerned about fengshui, while younger buyers are less superstitious.

Like other wealthy residents, they furnish their homes with fine European classical furniture from Da Vinci, as well as expensive paintings and vases.

Their homes have at least two to three maids and they own cars ranging from BMWs and Mercedes-Benzes to Aston Martins, Lamborghinis and Bentleys.

They may have a yacht berthed next to their house that they take for a leisurely sail in the vicinity.

Behind all the creature comforts are also the hard calculations made for a good investment.

Said DTZ's South-east Asia research head Chua Chor Hoon: 'The main thing they want is a place that is politically stable so that over the long term the investment is safe and can appreciate in value.'

This article was first published in The Straits Times