Singapore - A bungalow in a prime seafront location on Sentosa Cove has been sold for a near-record price of S$2,923 per square foot (psf) on land area.
The absolute price works out to S$28 million for the property, which is located along Ocean Drive and consists of two storeys and a basement. It sits on 9,580 square feet of land with 99-year-leasehold tenure starting June 2005 - reflecting a balance lease tenure of 88 years.
This is only the second caveat to be lodged for a bungalow purchase in Sentosa Cove this year. The property has four bedrooms, a meeting room, a swimming pool (with views of the sea, CBD and container terminals), a koi pond and a roof terrace.
The property is being sold by Hii Yii Ann, a Malaysian citizen and Brisbane businessman who has been in the news in Australia on tax evasion charges according to Australian media reports. Mr Hii, who is in his 50s, made his fortune in the timber business in Papua New Guinea.
BT understands that the buyer is a Chinese citizen and Singapore permanent resident (PR) in his late 30s, involved in an IT/telecom business.
Gillian Wu of PropNex represented the buyer, but declined to comment on his identity or the business sector he is involved with.
"This ultra high net worth client had been looking for a suitable residential property in Singapore for some time. He and his family viewed several high-end apartments in the prime districts but nothing caught his eye until he saw this bungalow," said Ms Wu. A big part of the decision to buy the bungalow had to do with its interior design; it has been renovated with high-quality materials and has expensive furniture and fittings. The seafront location was also a key draw, she added.
Word in the market is that the seller invested a few million dollars fitting out the interior, adding sculptures, paintings and decorations, creating a distinctly Chinese theme. He bought the property for S$25 million in 2011 from a seasoned Singaporean bungalow investor.
The two Sentosa Cove bungalow deals year to date follow four transactions in 2015 and three in 2014 - all significantly down from 18 sales in 2013. The best year was 2010, with over 50 transactions.
The record psf on land price for a Sentosa Cove bungalow transaction is still the S$2,989 psf fetched for 81 Ocean Drive in 2010; the absolute price in that deal amounted to S$28.2 million.
Steve Tay, vice-president (resale) of CBRE Realty Associates, said the near-record price set for the latest bungalow deal did not signal a return to peak prices in the waterfront housing district. It was a one-off transaction, reflecting the price premium commanded for a well-located property with seaview and plush fittings and furnishings - compared with a property with average view and design.
Agreeing, Singapore Christie's International Real Estate managing director Samuel Eyo reckons that the major deterrents for Sentosa Cove bungalow deals include the 15 per cent additional buyer's stamp duty (ABSD) payable by foreign buyers on any residential property purchase in Singapore. PRs pay 5 per cent ABSD when they buy their first residential property and 10 per cent on subsequent purchases.
Singaporean bungalow buyers mostly eschew 99-year-leasehold properties (the tenure on Sentosa Cove), noted Mr Eyo. "Families with young children would rather pick up freehold Good Class Bungalows (GCB) in popular areas - many of which are near good schools - than to live on Sentosa Cove, which is not near any schools," he said.
Only Singapore citizens are allowed to buy landed residential properties in GCB Areas under a policy change in the second half of 2012.
On Sentosa Cove, a foreigner - whether a PR or not - is eligible to seek approval to buy a landed home. A non-citizen is allowed to own just one landed residential property in Singapore and that too for owner occupation only.
This article was first published on October 5, 2016.
Get The Business Times for more stories.