Developers eye bulk sales in weak market

Some developers caught out in the weak market are looking to bulk-sell their luxury projects to avoid hefty penalties.

City Developments (CDL) is believed to have been marketing one of two towers at the as-yet-unlaunched Gramercy Park, while OUE is looking to offload one of two towers at Twin Peaks.

Property funds are among the likely buyers.

A bulk sale makes sense for the companies as it can allow them to avoid penalties on unsold stock, while funds see relative value between Singapore and Hong Kong, said Savills Singapore research head Alan Cheong.

"They have also raised a lot of money which they need to deploy," he added.

The freehold Gramercy Park in Grange Road, which comprises 174 units in two 24-storey towers, was about 92.9 per cent completed by the end of last year and is likely to obtain its temporary occupation permit (TOP) in the second quarter of this year.

CDL has until the middle of 2018 to sell all the units before incurring Qualifying Certificate (QC) extension charges, a spokesman for the group said.

The asking price could be around $2,600 per sq ft (psf) for Gramercy Park, according to market talk.

OUE is looking to bulk-sell the 231-unit Tower 1 of Twin Peaks, which is unoccupied. The 99-year leasehold project obtained its TOP in February last year, which gives OUE until February next year to sell all the units before incurring QC penalties.

It has sold 72 units - 31 per cent of Tower 2 - at an average price of $2,861 psf.

OUE persuaded several buyers of units in Tower 1 to switch to Tower 2 a couple of years ago, according to market talk.

OUE said in a filing last Friday in response to Straits Times queries: "From time to time, we have had interested parties exploring potential bulk-purchase of OUE Twin Peaks. However, nothing definitive has emerged from such exploratory discussions."

The high-end market has been muted of late, with foreigners picking up fewer condominium units in the core central region in the fourth quarter.

In the first three quarters of last year, they bought an average of 61.1 units per month but this nearly halved to 33.3 units a month in the fourth quarter, noted Mr Cheong.

Still, for funds and individuals alike, it is not a bad time to go shopping in the luxury home segment, said Mr Samuel Eyo, managing director of Singapore Christie's Homes.

"Many developers are giving good discounts, especially for the larger properties," he noted.

For example, a four-bedroom apartment at Alba sold last month had a discount of 9.4 per cent on the transacted price, according to caveats.

This article was first published on February 01, 2016.
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