Tag Archives: Cheung Kong (Holdings)

Singapore developers’ tactics over ABSD could lead to intervention

Posted on 3 May 2012 | Comments Off on Singapore developers’ tactics over ABSD could lead to intervention

‘Marina Bay Suites’: developers, Cheung Kong, Hongkong and Keppel Land are offering ABSD returns to retailers.

In a move to surge Singapore’s property sales several developers are reimbursing the deterring additional buyer’s stamp duty (ABSD).

Imposed by the government in late 2011, ABSD was introduced to stifle Singapore’s residential property market.

Regulators’ eyebrows are now raised and may have to intervene in this new tactic deployed by developers to increase property sales, crippled by ABSD. Reimbursement of the stamp duty from developer to purchaser has caused concern over the possible distortion of property and loan values.

This latest strategy supersedes the common marketing gimmicks of furniture vouchers and discounts to defray ABSD.

A property consultant who did not wish to be named told Asia One: “The ABSD reimbursement is being made in this way so that it does not affect the pricing…which may upset their earlier buyers who did not get to enjoy the discount.”

He confirmed that a full reimbursement of the steepest ABSD rate of 10 per cent to foreigners purchasing residential property could amount to a significant discount that is not quantified in the Urban Redevelopment Authority’s (URA) records.

Wide scale returns of ABSD could sabotage the government’s policy to promote transparency in the market, according to industry assessors.

Sales caveats may not reflect the actual purchase price of the property as “discounts” are given only after a buyer has completed the transaction, in contrast to discounts which are accounted for into the reported transacted price.

In response to Business Times queries, the Ministry of National Development (MND) said: “As long as they do not distort prices, there is no need for the government to intervene against such business decisions and practices.

“We will therefore continue to monitor the market closely for now to ensure transparency.”

Developers, wholly or partially, reimbursing the ABSD include Cheung Kong (Holdings) Ltd, Far East Organisation, Allgreen Properties and Aspial Corporation’s World Class Land.

Projects involved range from high-end to mass-market developments. Cheung Kong, Hongkong Land and Keppel Land are jointly developing Marina Bay Suites in the Marina Bay area; Thomson Grand in Upper Thomson – a Cheung Kong project; an Allgreen project, Holland Residences in the Holland Road area.

Since the introduction of its reimbursement scheme in February, Cheung Kong has sold approximately 165 units at Thomson Grand; around ten per cent of sales were to foreigners. Units retailed between US$1,250-1,450 per square foot.

Marina Bay Suites’ management said: “more than 70 per cent of the units have been sold and we continue to sell our apartments through private previews and regional road shows, some of which were done in partnership with marketing agents.”

Keppel Land clarified that it does not offer ABSD reimbursements for its solo projects.

A spokesman from Property Enterprises Development (Singapore), Cheung Kong’s subsidiary said: “The reimbursement of ABSD will be payable to the purchasers upon the payment of the 20 per cent of the purchase price, the proof of the Certificate of Stamp Duty on the Agreement and the duly executed sales-and-purchase agreement.”

The Real Estate Developers’ Association of Singapore (REDAS) said: “it supports MND’s decision on fair and transparent practices which will enable homebuyers to make an informed decision.

In addition to price transparency the practice of ABSD reimbursement has raised concern over the distortion of loan value.

Ku Swee Yong, CEO of International Property Advisor said: “Buyers who take loans should declare the value of such incentives to the banks when they apply for the loan by giving the bankers the Offer to Purchase and all other side letters. Otherwise the loan-to-value ratios might exceed MAS’s limit.”

The Monetary Authority of Singapore (MAS) confirmed that when securing home loans, consumers should disclose to the bank any rebates or discounts received from the seller or any other party in the transaction. The bank will deduct any discount, rebate or any other benefit offered from the purchase price before calculating the loan amount, according to Asia One.

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Posted in Cooling Measures, Developers, Property Market / Real Estate

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Unit at The Sail @ Marina Bay hits $2,999 psf

Posted on 2 Jun 2011 | Comments Off on Unit at The Sail @ Marina Bay hits $2,999 psf

Residents of the 1,111-unit The Sail @ Marina Bay enjoy a spectacular view of Marina Promenade.

There has been a flurry of transactions at The Sail @ Marina Bay, with prices playing catchup with those at Marina Bay Residences (MBR).

Last month, a unit at MBR hit an alltime high of $4,368 psf. A 2,368 sq ft apartment on the 46th floor was sold for $10.3 million on April 15. This trumped the previous record of $3,790 psf, which was achieved when a 1,959 sq ft unit on the 46th floor was sold for $7.2 million in Sept 2010.

At the 1,111-unit The Sail @ Marina Bay, prices breached the $3,000 psf level for the first time this year, when a 1,184 sq ft unit on the 61st storey was sold for $3.6 million ($3,040 psf) on April 4. Prices peaked in April 2008, when a 1,033 sq ft unit was sold for $3.5 million ($3,387 psf).

The two condominiums are located along Marina Boulevard and enjoy spectacular views of Marina Promenade. MBR is a 55-storey, 428-unit luxury waterfront condo located within the Marina Bay Financial Centre, a mixed development built by the consortium of Hongkong Land, Keppel Land and Cheung Kong (Holdings). The condo was completed last year. Meanwhile, The Sail, developed by City Developments and AIG Real Estate, was completed in 4Q2008, at the height of the global financial crisis.

Desmond Tan, group director of Dennis Wee Realty, says, “There is strong demand for both The Sail and MBR, as they are the only two condos with a good bay view. MBR commands a better price than The Sail, as it is farther away from the financial centre and nearer to the integrated resort. MBR is also newer. In terms of monthly rental, a studio unit at The Sail can fetch about $4,000, while a one-bedroom unit at MBR can command between $4,500 and $4,800.”

According to a private investor who owns several units at The Sail, “there’s no doubt that The Sail currently offers the best value for money. That’s why it continues to be the most highly transacted of the properties in the area”.

Between April 29 and May 10, The Sail saw three transactions, with prices ranging from $2,503 to $2,999 psf, according to caveats lodged with URA Realis.

A 2,077 sq ft unit on the 59th floor was sold for $6.23 million ($2,999 psf) on April 29. This represents a 169% gain over the last transacted price of $2.3 million ($1,116 psf) in 2004.

Subsequently, a 1,797 sq ft unit on the 16th floor changed hands for $4.5 million ($2,503 psf) on May 4.

A third transaction was for a 613 sq ft unit on the 24th floor, which was sold for $1.57 million ($2,559 psf) on May 9. This represented a 50% gain over the last transacted price of $1.04 million ($1,701 psf) in April 2007. Prior to this, the unit sold for $921,000 ($1,501 psf) in January 2007 and $726,240 ($1,184 psf) in December 2005.

Tan says, “Asking prices at The Sail are $3,200 to $3,500 psf currently. Most buyers are foreigners. We see quite a few buyers from China and Hong Kong.” He adds that the strong prices at MBR will have a positive impact on condos at One Shenton and The Cliff, al- though it is hard to quantify the extent of the impact, as “there is a big difference” in the view from condos along Shenton Way and from those at Marina Boulevard.

The latest transaction at the 341- unit One Shenton was for a 581 sq ft unit on the 20th floor, which changed hands for $1.28 million ($2,202 psf) on May 9. Prices at the condo hit a high of $2,757 psf in 2007, when a 1,894 sq ft unit on the 44th floor was sold for $5.2 million. The condo was developed by City Developments and completed earlier this year.

Another project completed this year is The Clift along Mccallum Street, a short walk from the Tanjong Pagar MRT Station. The latest transaction at the 312- unit condo developed by Far East Organization was for a 527 sq ft unit on the 17th floor. It was sold for $1.05 million ($1,998 psf) on May 9, representing a 44% gain over the last transacted price of $727,000 ($1,378 psf) in 2007. Prior to that, the unit sold for $577,786 ($1,095 psf) in 2006.

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Source : TheEdge – 2 Jun 2011

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Posted in Luxury Property, Property Market / Real Estate, Property Price, Property Transactions

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