12 Sentosa Cove luxury villas relaunched at a discount

 

Monday, May 26, 2014

Kalpana Rashiwala

The Business Times

XIMENG Land, controlled by mainland China parties, is relaunching the balance 12 luxury villas on Pearl Island in Sentosa Cove at $2,185 psf on land area. The price is inclusive of a 5 per cent discount to the $2,300 psf list prices for the units. A year ago, the developer's asking price was $2,400 psf.

Absolute prices vary from about $14.3 million to $25.5 million per villa. Pearl Island is one of the five man-made islands in the upscale waterfront housing district.

"These are the last remaining brand-new luxury villas in the island developments in Cove, fully fitted and ready for occupation," said Steve Tay, associate director at Newsman Realty, which was last month appointed sole marketing agent for the villas.

Since 2010, Ximeng has sold seven of the project's 19 villas at prices ranging from $1,904 psf to $2,228 psf on land area. The buyers comprise Singaporeans, Indonesians and mainland Chinese.

The seven units sold include two adjacent units bought by members of the Liu family that controls Ximeng Land. One was purchased for $17.1 million or $1,904 psf on land and the other, for $19.5 million or $1,906 psf.

The highest absolute price achieved for the seven sold units was $27 million (translating to $2,162 psf), for a bungalow on 12,486 sq ft of land - the biggest of Pearl Island's 19 villas.

The project received Temporary Occupation Permit in the first half of 2012. The villas sit on plots ranging from 6,555 sq ft to 12,486 sq ft and with total floor areas (including roof terrace) of between 8,000 sq ft and 11,000 sq ft. Each villa comprises two storeys in addition to a roof terrace and basement. All four levels are accessible by a private home lift. The bungalows have five to seven bedrooms with en-suite bathrooms.

The basement of each unit houses a lounge and wine cellar, and semi-open garden in addition to a concealed utility area, a maid's room and toilet. The top floor houses an entertainment room with powder room and a roof terrace.

Each villa is built with wet and dry kitchens fitted with Miele refrigerators, wine chiller, ovens and cooker hoods/hobs. Big imported marble tiles cover the floors of the living, dining and bathrooms. Stairs also have marble slabs.

Each villa has its own private berth (imported from France) and swimming pool.

Ximeng Land is owned by the majority shareholders of Ximeng Asset Holdings Co, the parent company of Beijing Ximeng Real Estate Co, a developer of luxury building projects in Beijing, Yantai and Jinan, according to a December 2007 news release issued by Sentosa Cove Pte Ltd announcing the award of Pearl Island to Ximeng Land.

A company search of Singapore-incorporated Ximeng Land (S) Pte Ltd listed its shareholders as Liu Yangang, Liu Yanguo and Liu Yanqiang, all Chinese citizens based in Beijing.

Ximeng Land was awarded the 99-year leasehold site in late 2007 for $215.65 million, or $1,350 psf on its land area of 159,740 sq ft. Mr Tay said that of the 12 units at Pearl island that have yet to be sold, four are under negotiation while one has been sold pending approval from the Land Dealings (Approval) Unit. He also revealed that talks are under way with a "very prominent" European family to buy up to five villas.

Sentosa Cove is the only place in Singapore where foreigners who are not Singapore permanent residents (PRs) may buy a landed home, though this is subject to LDAU's nod.

A foreigner, whether a PR or not, is allowed to buy only one landed residential property on Sentosa Cove, which must be for owner occupation and cannot be rented out.

The one landed property limit is on a per-family basis, including economically dependent children. Thus, if a non-Singaporean couple already owns a landed home in Sentosa Cove, their non-Singaporean children who are still studying and not economically independent would not qualify to buy another landed property in Sentosa Cove. The same treatment applies to grandchildren.

However, grown-up children/grandchildren who are economically independent from their parents/grandparents may apply to buy their own landed home on Sentosa Cove.

The Sentosa Cove bungalow market is experiencing a dry patch. CBRE's analysis of URA Realis caveats data shows that there has been just one caveat lodged for a bungalow on Sentosa Cove so far this year. BT understands that the deal may not have gone through.

Last year, there were 18 bungalow transactions totalling $367 million. The average price works out to $20.16 million per transacted bungalow and $2,096 psf on land area. In 2012, 23 properties were transacted at a total of $461 million - with an average price of $20.5 million per transacted bungalow and $2,164 psf.

Samuel Eyo, director (prestige homes) at Savills (Singapore), said a major bug-bear among foreign buyers was the high transaction cost - 18 per cent in total buyer's stamp duties (the 3 per cent regular stamp duty plus 15 per cent additional buyer's stamp duty). "And if these investors have to exit within a year, they're staring at 16 per cent seller's stamp duty - regardless of whether they make a profit or loss. So total transaction taxes could be as high as 34 per cent. On a $20 million bungalow purchase on Cove, that would amount to $6.8 million!"

"Such UHNW investors will always compare Singapore against other markets," he added.

Highlighting that LDAU approval cannot be taken for granted - Mr Tay let on that earlier this year Ximeng Land had granted an option for a villa at Pearl Island but LDAU turned down the proposed non-PR foreign buyer's application.

The difficulty in finding genuine and motivated sellers has also caused a dearth of bungalow deals on Sentosa Cove lately. "Some owners are calling for high prices as they remain positive on the potential of Sentosa Cove. Don't forget: We are looking at a limited number of only about 300 bungalows in this luxury enclave, where PRs and foreigners can buy," said Mr Tay.

Despite the current dry spell in bungalow deals on Sentosa Cove, Mr Tay is confident of selling out all 12 remaining villas on Pearl Island by year-end, given the attractive discounts by the developer.

This article was published on May 24 in The Business Times.