Singapore - TO better assist developers selling high-end homes in Singapore, PropNex and JLL have launched a new initiative. A sales team of about 200 agents are carefully selected out of PropNex's 5,500 salespeople to support the joint efforts of JLL and PropNex in project marketing of luxury homes for developers.
This initiative comes a year after JLL Singapore acquired a 20 per cent stake in PropNex's project marketing arm PropNex International in August 2014, and some 50-60 of JLL's agents crossed over to PropNex.
Since then, both companies have broadened their scope of co-operation in areas such as auction and project marketing of commercial developments.
Chris Fossick, JLL managing director for Singapore and South-east Asia, said that developers of luxury properties in Singapore need more help than before to move their inventories since property cooling measures have hurt demand from foreigners and investors.
PropNex CEO Ismail Gafoor noted that some of these developers will soon have to clear their stock urgently to meet the conditions under the Qualifying Certificate (QC) rules and the remission for additional buyer's stamp duty (ABSD).
The QC rules require most developers here to pay extension fees for condo units which are not sold within two years from the project completion. Since December 2011, developers have also been required to develop any residential site that they acquire and sell all the units within five years in order to qualify for the remission of ABSD on the land cost.
"Many developers will be facing their biggest challenge by year-end or next year, and they need a greater outreach to dispose their properties," Mr Ismail said. "If the developers decide to cut prices and relaunch their projects, they need a trained workforce to market their projects."
Both PropNex and JLL went through a rigorous process of selecting salespeople who met strict criteria in terms of track record, communication skills, ethics, product and market knowledge. According to Mr Ismail, each of these agents must have successfully closed at least S$2 million worth of properties in the past two years or closed at least one transaction for a high net worth individual (HNWI).
Shortlisted candidates then underwent compulsory training in project marketing and were required to pass an interview before they could be certified under the "Luxury Real Estate" brand. These agents were handed their certificates at a ceremony on Tuesday.
Among them, Nancy Hawkes, senior associate district director at PropNex who transferred from JLL in late 2014, noted that the certification is an endorsement by JLL and PropNex that these 200 agents "are ready to go out and market developers' high-end projects".
Nizam Gafoor, associate district director at PropNex, said that he is seeing a lot of potential in the luxury market and hence this brand certification is a timely one. He has been handling HNWI clients and lead a team of 180 agents.
Out of a total of 1.3 million homes in Singapore, private and public included, JLL estimates that luxury homes represents one per cent of the total stock. These properties are mostly located near Orchard Road, Marina Bay and Sentosa, and their values can vary considerably - from S$5 million to S$50 million.
Despite the small market segment, there is a need for a specialised approach to help luxury developers, Mr Fossick said. "Relative to other major markets and in the context of the wealth in Singapore, our luxury homes are undervalued," he added. "For example, Hong Kong's high-end residential market, despite facing similarly strong governmental measures, is trading at 165 per cent of Singapore's equivalent, while both New York and London are close to 100 per cent higher than Singapore."
Last year, as many as seven major prime residential block deals worth S$900 million were transacted, which suggests that the market has found its bottom or is close to it, Mr Fossick posited.
Mr Ismail noted that while PropNex offers a wide range of sales and leasing services, from HDB flats to condominiums, less is known about its success with sales of luxury homes.
Last year, a PropNex agent brokered the sale of the most expensive penthouse in Singapore - a S$51 million deal at Le Nouvel Ardmore. Likewise, PropNex agents sold the penthouses at St Regis Residences for S$12.2 million and Marina Bay Suites for S$18.98 million, while others have brokered Good Class Bungalows (GCBs) and luxury houses at Sentosa.
This article was first published on January 27, 2016.
Get The Business Times for more stories.