$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.