Tag Archives: Heeton Holdings

Luxury homes left empty in quiet market

COMPLETED luxury homes without owners are gathering dust in exclusive pockets of the city centre as developers hold off selling them in a moribund luxury market.

In the Ardmore Park area off Orchard Road, for instance, an entire condominium project has been completed but not launched for sale. Other projects nearby could soon face the same fate.

Developers who can afford to wait may have chosen to hold back launches in the prime Districts 9, 10 and 11 given the very quiet luxury market, analysts say.

While the residential property market in general has slowed down markedly, the top end has been the hardest hit.

Experts point to recent rounds of property market cooling measures that have driven away many buyers in the high-end segment.

“Wealthy property buyers are the most savvy investors… Many are not in a hurry to buy luxury properties,” said R’ST Research director Ong Kah Seng.

He added that developers may find it feasible to turn their upmarket developments into serviced apartments, though that could incur hefty additional costs, such as beefing up security.

“Another option is to massively slash prices and sell the units in bulk to mega investors,” he said.

One recently built condo that has not been launched is the 58-unit Ardmore Residence, according to Urban Redevelopment Authority (URA) data.

The freehold development by Pontiac Land received its temporary occupation permit (TOP) in the second quarter of last year.

It sits on the site of the old Pin Tjoe Court, which Pontiac Land bought through a collective sale for $201 million in 2006, or $1,358 per sq ft (psf) of potential gross floor area. Units in the project are large, at about 3,300 sq feet on average.

A Pontiac Land spokesman said the units are being leased out at around $25,000 a month and that the developer has traditionally preferred to lease out its projects rather than sell them.

Nearby, the 34-unit Sculptura Ardmore project developed by SC Global has also not been put on the market.

However, it still has some time – it is still under construction and is expected to get its TOP this year. Prices for its units had previously been expected to start from $5,000 psf.

Several streets south of the Ardmore Park district, the 30-unit iLiv @ Grange project in Grange Road also has yet to be formally launched, according to URA data. The freehold project got its TOP in the fourth quarter of last year.

Its developer Heeton Holdings first unveiled the project in 2010 with the intention of selling it at above $3,000 psf.

Heeton had bought the site, which formerly housed Grange Court, for $72.8 million, or more than $1,700 psf per plot ratio (ppr) in 2007.

But it was said last year to be looking to bulk-sell the units at $2,200 to $2,300 psf to a single buyer, according to media reports.

Heeton has two years after TOP to finish selling all the units in the project, under Qualifying Certificate (QC) conditions.

Analysts said the QC rules were turning up the heat on some high-end developers to clear their unsold stock.

The rules give developers up to five years to finish building a project and two more years to sell all the units. They are not allowed to rent out unsold units.

Heeton is bound by QC rules because it is a listed company, but Pontiac Land is privately held.

Developers whose shareholders and directors are not all Singaporeans have to get a QC to buy residential property for development. This is imposed to control foreign ownership of land here.

*****************Background Story *****************


Ardmore Residence

  • Developer: Pontiac Land
  • Number of units: 58
  • Location: Ardmore Park, at the site of the old Pin Tjoe Court, which Pontiac Land bought through a collective sale for $201 million in 2006.
  • When TOP was received: Second quarter of last year

iLiv @ Grange

  • Developer: Heeton Holdings
  • Number of units: 30
  • Location: Grange Road, at the site which formerly housed Grange Court. Heeton bought the site for $72.8 million in 2007.
  • When TOP was received: Fourth quarter of last year

Market for luxury homes muted

The luxury residential property sector should be performing quite consistently this year but luxury residential property prices look unlikely to climb to pre-crisis levels anytime soon, according to market-watchers.

“Current prices for luxury residential property prices per square feet (psf) are in the S$2,500 to S$4,500 range,” said Mr Liang Thow Ming, executive director and head of residential services at Credo Property Services. “This is still some way off the record high of S$5,000 psf registered in 2007.”

Mr Liang’s pick for the star performer this year would be the mid-market segment, where he expects “a higher percentage increase in overall prices”.

He feels that the demand for luxury residential property – “which is more dependent on foreign buyers than any other segment” – is “unlikely to pick up substantially due to the geo-political situation in the world”.

Another reason could be the fact that en bloc sellers are “setting certain high expectations” in terms of prices, he said, adding that land supply for luxury residential developments in the Core Central Region (CCR) is very much dependent on collective sales.

Higher asking prices and the limited supply of land could put a damper on the number of luxury developments to be rolled out.

Similarly, market-watchers like UOB KayHian’s Mr Vikrant Pandey are not bullish, despite the shift in buying interest toward the CCR and the Rest of Central Region (RCR) for last month, as indicated by figures from the Urban Redevelopment Authority (URA).

The latter’s flash estimates showed that private home sales last month increased 25 per cent to 1,386.

Mr Pandey explains that the surge last month could be a temporary one – “a result of pent-up demand from February as buyers had held back on their property purchases due to the Chinese New Year”.

“While the month-on-month sales have picked up, the year-on-year volumes remain weak, indicating that measures are slowly but steadily taking effect,” he added.

“Market sentiment is cautious,” said Mr Danny Low, chief operating officer and executive director of Heeton Holdings. Heeton, along with KSH Holdings and TEE International, last week launched The Boutiq, a luxury residential development on the site of the former Mitre Hotel at Kiliney Road.

To date, The Boutiq has sold 39 units of the 52 units launched in Phase One at an average price of S$2,350 psf – a result that Mr Low said met expectations.

He added that he “hopes the European and United States markets will recover in speed, so that investors will come back”.

Goldman Sachs is slightly more optimistic about the luxury sector. In a recent research note on the Singapore property sector, analysts Paul Lian and June Zhu wrote: “Luxury is seeing renewed interest, mainly from foreign buyers.”

“16 units (versus only one unit in February) were sold above S$3,000 psf,” it said. “Of note, one unit at Scotts Square was sold at S$4,334 psf and one unit at Boulevard Vue fetched S$4,308 psf.”

Other luxury residential developments to be launched this year include Heeton’s iLiv@Grange and City Development’s Jean Nouvel Residences at Anderson Road, and Buckley 9 & 11.

Source : Today – 25 Apr 2011