Asset repricing at Sentosa Cove
The 99-year leasehold homes in Singapore’s premier waterfront residential enclave, Sentosa Cove, continue to draw interest, especially at property auctions. It is where new benchmark prices are sometimes set as property hunters are pitted against property owners and banks with repossessed properties put up for mortgagee sales.
At Colliers International’s auction on June 21, a six-bedroom bungalow on Paradise Island was put up for mortgagee sale. The bungalow sits on a land area of 7,369 sq ft and comes with a private swimming pool and private berth. The house drew a crowd to the auction last week, but there were no bids. The opening price was $13 million ($1,764 psf). Thus, the property was withdrawn. It marked the first mortgagee sale of a bungalow in Sentosa Cove.
Source: Colliers International
A bungalow on Paradise Island was put up for auction at $13 million. It marks the first mortgagee sale of a bungalow in Sentosa Cove
Colliers’ auction also saw a unit at The Residences at W Singapore Sentosa Cove put up for mortgagee sale. The 1,227 sq ft unit on the fifth level has two bedrooms, private lift access and a view of the marina at One°15 Marina Club. It had an opening price of $2.48 million ($2,021 psf) but, likewise, drew no bids and was withdrawn. This is the second time the unit has been put up for auction. It made its debut in Colliers’ auction in May with an opening price of $2.5 million. The previous owner paid $3.55 million ($2,891 psf) for the unit in May 2010.
“Different properties in Sentosa Cove have different attributes, including age, location, views, amenities, branding and finishing,” says Tricia Song, Colliers International head of research for Singapore. “This explains the wide range of pricing — $1,200 to $1,900 psf — transacted for the Sentosa Cove condominiums in 2017 so far. A property such as Residences at W is likely to command a premium for its links to the Starwood brand, [with] amenities such as a concierge service, private berths and [its] proximity to retail and F&B outlets at Quayside [Isle].”
Second mortgagee sale at The Residences at W
A second unit at The Residences at W surfaced as a mortgagee sale at Edmund Tie & Co’s (ET&Co’s) auction on June 28. The third-level unit has two bedrooms and private lift access. At 1,238 sq ft, it is slightly bigger than the one put up for auction by Colliers. However, it has a view of the waterway and the bridge, instead of the marina. The opening price for the unit was $2.2 million ($1,777 psf), but it was withdrawn without a sale. The previous owner purchased it for $3.49 million ($2,822 psf) in April 2010, according to a caveat lodged then.
The Residences at W contains 228 units in six-storey blocks, with a mix of two- to four-bedroom apartments. The project was completed in 2011 and is located opposite Quayside Isle, a commercial block featuring Jasons gourmet supermarket, cafes and restaurants overlooking the boardwalk and marina.
Next door to The Residences at W is the 240-room W Hotel Singapore Sentosa Cove. Singapore-listed City Developments Ltd (CDL) launched The Residences at W in early 2010 and 25 units were sold at prices ranging from $2,521 to $2,968 psf then. It is the only condo development in Sentosa Cove that is part of a mixeduse project with a luxury hotel and commercial element on Quayside Isle. The entire development is called The Quayside Collection.
In December 2014, CDL announced the securitisation of The Quayside Collection via a novel profit participation securities scheme in a $1.5 billion deal. Besides CDL, Blackstone Group and Malaysia’s CIMB Bank also participated in the PPS. The assets injected into the scheme were the remaining 203 units at The Residences at W, the W Hotel and Quayside Isle commercial complex. At the end of the five-year investment tenure of the PPS, the units at The Residences at W will be sold at prices from $2,400 psf.
The view of the marina from The Residences at W Singapore Sentosa Cove
Prices at The Oceanfront revisit those of 2006
However, some owners have been prepared to accept lower prices for their units at Sentosa Cove. For instance, the owner of a three-bedroom-plus-study unit at The Oceanfront sold it before it was put up for auction a second time by ET&Co on June 28. The 1,894 sq ft unit is on the eighth floor of one of the six tower blocks in the landmark 264-unit The Oceanfront. It was last put up for auction by ET&Co in May with an opening price of $2.65 million ($1,399 psf), but was withdrawn as there were no bids. However, the unit is believed to have been sold at a price below $1,300 psf in a private treaty deal.
The latest transaction at The Oceanfront was for a 1,776 sq ft, three-bedroom unit on the ninth floor of another tower that fetched $2.43 million ($1,368 psf). In terms of price psf, it is equivalent to the price level when the project was first launched in 2H2006.
Bungalow owners testing auction market
With buying activity returning to the Sentosa Cove bungalow market this year, owners are also testing the auction market as a mode of sale. “They feel auctions are not just more transparent, but also give them greater visibility compared with the traditional way of marketing via just a sales agent,” says Joy Tan, head of auction at ET&Co.
At ET&Co’s auction, two identical bungalows on Cove Drive developed by the same owner, were put up for sale. One of them has a land area of 6,925 sq ft while the other sits on a 6,706 sq ft site. However, both have a 5,500 sq ft built-up with two levels and a basement, a home lift, six en suite bedrooms and a study. The opening prices for the bungalows were $19.8 million ($2,953 psf) for the smaller one, and $19.9 million ($2,874 psf) for the larger one.
“Based on the build quality and contemporary design of the two bungalows which have views of Tanjong Golf Course, if they are sold at [the asking] prices, it will provide an uplift to the Sentosa Cove market,” says Steve Tay, vice-president of resale at CBRE and a specialist in luxury bungalows in Sentosa Cove.
The owner of the two houses on Cove Drive is said to be a Singaporean investor who owns five bungalows in Sentosa Cove. Besides the two bungalows on Cove Drive, he also developed another two on Cove Grove. The fifth property at Sentosa Cove that he owns and which he did not develop is a bungalow on Pearl Island. Pearl Island contains 19 bungalows developed by Ximeng Land, a subsidiary of Chinese real estate group Ximeng Asset Holdings Co.
Two bungalows on Cove Drive were put up for auction by the owner-developer, with opening prices of $19.8 million and $19.9 million
Investors on Pearl Island
The Singaporean investor was also testing the auction market by putting up his bungalow on Pearl Island for auction on June 28 at an opening price of $16.5 million ($2,264 psf). The unit was purchased for $16.03 million ($2,200 psf), according to a caveat lodged in November 2010.
“This is a long-term investor who is prepared to hold on to his properties, selling only if he feels the price is right,” observes CBRE’s Tay.
The Pearl Island bungalows were completed in 2012 and the last two transactions lodged for the development were in October 2013, for $17.1 million ($1,904 psf) and $19.5 million ($1,906 psf). Both the units were said to have been purchased by directors of Ximeng Land.
The developer sold nine units in total and the remaining 10 were scooped up by the co-founders of privately held property group Evia Real Estate: Vincent Ong and Leslie Lim. The average price of the 10 units reportedly ranged from $1,500 to $1,600 psf, which reflected a bulk discount of 16% to 21%.
At the time of the purchase, Evia Real Estate’s Ong said prices in Sentosa Cove were bottoming. “While you may be able to pick up one or two bungalows at a cheaper price, the opportunity for a bulk purchase of bungalows at Sentosa Cove is rare,” he had commented.
Evia Real Estate is expected to enhance the bungalows on Pearl Island before rolling them out for sale towards the second half of the year at asking prices of $2,300 to $2,500 psf.
The bungalows on Pearl Island where Evia Real Estate co-founders Vincent Ong and Leslie Lim purchased 10 remaining units last year at an average price of $1,500 to $1,600 psf
This article appeared in The Edge Property Pullout, Issue 786 (July 3, 2017) of The Edge Singapore.
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