The Sail hits $1,840 psf

THE EDGE SINGAPORE| BY CHERYL CHEAH |

Transactions in the Marina Bay area may have tapered off during the first two months of the year, with sentiment affected by the additional buyer’s stamp duty (ABSD) introduced on Dec 8. “The ABSD definitely affected the number of transactions, and while prices had adjusted downwards, they were not by 20% to 30%, as predicted by property analysts, but more like 5%,” says Eric Tay, associate group director at Prop- Nex, who focuses on apartments in the Marina Bay district.

However, activity has picked up tremendously since the start of March, with mixed fortunes for sellers. Most recently, an 861 sq ft unit on the 37th floor of The Sail’s Tower 1 was sold for more than $1.58 million ($1,840 psf). The unit last changed hands in a sub-sale in mid-2007 for about $1.38 million ($1,600 psf). Before that, it was sold as part of a block purchase of seven units on that floor for a total of $9.64 million ($1,335 psf).

In January, an 893 sq ft unit on the 26th floor of Tower 2 changed hands for close to$1.52 million ($1,699 psf) in January. The unit was last transacted for $1,199 psf in December 2008 after the Lehman Brothers collapse.Hence, the owner saw a capital appreciation of 41.7% in just over three years. “There’s still opportunity for such sellers to take profit now, especially if they think the market is going to soften and they had bought the property during the last global financial crisis,” notes PropNex’s Tay. “Foreigners have also returned and are looking for buying opportunities in the resale market.”

However, owners’ asking prices at The Sail have gone up. Anecdotally, an owner of a high-floor unit who had asked for $1,850 psf adjusted it upwards to $2,100 psf over the past weekend. “Now, the owners are all indicating prices above $2,000 psf,” says Tay.

At One Shenton,  a 1,582 sq ft, three-bed-room apartment on the 23rd level changed hands for more than $3.12 million ($1,975psf) in early March. The owner had purchased the unit when the project was launched in January 2007 for $3.42 million ($2,159 psf), which meant the property’s value dropped 8.5% in five years.

On the other hand, a 570 sq ft studio apartment on the 19th floor changed hands for $1.22 million ($2,139 psf) in late February. The previous owner had purchased the unit just two years ago, in January 2010, for $970,000 ($1,700 psf), enjoying a 25.8% gain in that short time. Owners of One Shenton are now asking for $1,900 to $2,100 psf for high-floor units, says Prop-Nex’s Tay. “Some buyers would rather buy a unit at One Shenton than at The Sail as there are fewer units at One Shenton, and the quality of the finishings is also better,”says an agent.

At Marina Bay Residences, the most recent transaction was in February, when a 1,970sq ft, three bedroom unit on the 30th floor was sold for $6.3 million ($3,198 psf).

The previous owner had paid just over $6 million ($3,049 psf) for the unit in March 2010. Prior to that, the unit had changed hands for close to $5.32 million ($2,700 psf) in June 2007, just three months after the first owner had bought it from the developer for more than $4.8 million ($2,450 psf).

Currently, owners at Marina Bay Residences are asking for $3,100 psf for low floor units and more than $4,200 psf for units on the high floors. Rents have also crept up, according to property agents, ranging from $12,000 to $13,000 a month for a four-bedroom unit last year to $14,000 a month for a recent transaction.

In the CBD area, the 312-unit The Clift on McCallum Street saw active trading since it was completed last year. However, there was a lull in transactions during the first two months of the year, following the imposition of the ABSD. As a sign that buying interest has returned, a 527 sq ft studio unit on the 29th level was sold for close to$1.19 million ($2,248 psf) in early March. The previous owner had purchased the unit from the developer for close to $1.15 million ($2,180 psf) in August 2007.

Based on URA’s latest rental statistics for 4Q2011, monthly median rents at The Clift, at $7.35 psf, were higher than those achieved at Marina Bay Residences ($5.92psf), The Sail ($6 psf) and One Shenton ($5psf), which are located in the more prestigious Marina Bay area.

Property agents such as Benny Lim, senior sale director at DTZ, expect transaction activity to improve in 2Q2012. “The resale market should pick up in the next quarter,as there are still secondary market transactions in the prime districts, and prices are relatively stable,” he says.