Arrival of the super-rich in Singapore

By yahoosingapore – November 11th, 2010

 

By Seah Chiang Nee

A luxurious 7,072 sq ft penthouse at a prime district has just changed hands for S$30 million in one of the most expensive deals on a per square foot basis.

The buyer was a permanent resident from Hong Kong and, the seller, an Indian tycoon who had bought it in 2006 for S$17.3 mil (RM41.21mil).

The cost of the triplex with five bedrooms and an 11m swimming pool worked out to S$4,242 per sq ft, a record in land-scarce Singapore.

Last June, an unknown Chinese national snapped up a bungalow on Sentosa Island for S$36 million, the highest paid for a residence here.

The PR holder from China had considered the price a “bargain”, according to the agent who handled the sale.

These are among a rising number of wealthy foreigners – especially Chi­nese, Indians and Indonesians – who have made this city their family residence while doing business outside.

Asia’s growing wealth, particularly from China and India, is slowly making its way into Singapore. More Europeans, too, are parking their money here.

For a glimpse of a Singapore in, say, another 10 or 15 years just take a picture of Monaco or Zurich and superimpose it on this island.

What will emerge is a city of wealth – transient and abiding, a land of personal banking, celebrity-chef dinners, where Bentleys, Lamborghinis and Ferraris ply the street and branded goods will become daily items.

An example of the foreign presence can be gauged at Sentosa Cove, one of Singapore’s most posh and expensive waterfront projects.

More than 3,000 people now live there. They have come from 22 countries, the top five nationalities being Singaporeans (who make up 40%), Australians, Britons, Germans and Chinese.

“Singapore has opened up a lot in recent years and we’re drawing foreigners keen to park their money as well as live here,” a developer said.

The arrival of the nouveau riche has created new fortunes for Sing­apore’s upper middle class, but it has also widened the economic gap between the rich and the poor as few of the lower class derives much benefit from the phenomenon.

For the upper class, the story is clear. Last year the number of millionaires jumped by 26%.

Currently, 11.8% of Singaporean households have at least US$1 mil in investible assets (excluding property) each.

Some recent headlines gave an indication of the change, good and bad.

A Singaporean billionaire, Peter Lim, has just made a US$507 mil bid (since aborted) to buy England’s Liverpool football team.

And two Singaporeans displayed their wealth less gloriously at the casino tables.

One, a company managing director of a seafood business, lost S$26 mil in just three days, while the second, who was in the latest Forbes list of Singapore’s 40 richest people, dropped S$100 mil.

Easy come, easy go!

Cashing in on it, Citibank last week launched an exclusive Ultima credit card for the super rich in Singapore where members must have S$5 mil and admitted only by invitation.

Some of the nouveau riche came because of their children’s education.

Among them is action star Jet Li, who bought a bungalow for S$19.8 mil last year. He took up citizenship and sent daughter, Jane to study here.

Another new settler, US investment guru Jim Rogers, with a net worth of US$1.8 bil, also came to send his daughter to the reputable Nanyang Primary School two years ago. To ensure she got a better chance, Rogers and his wife had performed 40 hours of volunteer work, something the locals do.

Who are the richest foreigners living here?

The Forbes’ list of top 40 ranks China-born Zhong Sheng Jian, 48, as the fourth richest man in Singapore with a net worth of US$2.5 bil.

And 47 year-old Indian-born Sudhir Gupta, now a naturalised citizen is ranked 13th richest. He has a personal fortune estimated at US$320 mil.

Seventeen percent of foreign buyers of high-end property in the first quarter are Chinese, and the number is rising.

One out of five bought houses in prestigious multi-million dollar districts of 9 to 11, the Central Business District (CBD) and Sentosa.

Some salesmen have reported cases of Chinese buyers paying the down payment with a bag of cash, leading to suspicion they may be keen to cover the money trail.

Recently a growing number of foreigners have turned to buying landed properties.

Under the law foreigners, including PRs, cannot buy any property on land or any apartment with fewer than five storeys – except with special approval.

Under its strategy of attracting the wealthy and talented to settle here, the government appears to be loosening the screw.

In the first half of this year, 150 such sales were allowed, most in the prime, rich areas.

Local critics are protesting against such sale of precious landed properties. “It is like selling the country’s Crown Jewels to outsiders,” one blogger wrote.

The influx of foreign wealth is not welcomed by all Singaporeans. Some see their cake becoming smaller and more expensive.

Many of working class citizens living in the heartland do not see much benefit from having so many rich people around – but they feel the pain of rising costs.

A polytechnic student asked: “And what happens to us when they suddenly take their money and go home?”

A former Reuters correspondent and newpaper editor, the writer is now a freelance columnist writing on general trends in Singapore. This post first appeared on his blog, www.littlespeck.com, on October 16, 2010.