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When a couple or family buys a stack of condo apartments in 1 go

When a couple or family buys a stack of condo apartments in 1 go
A Chinese national is said to have bought 20 units at CanningHill Piers, a condominium along the Singapore River, for more than $85 million, Lianhe Zaobao reported on Thursday (Jun 2).
PHOTO: CapitalLand, City Development

How does it usually feel when an individual buyer or family swoops into a show flat and decides to buy a stack of condo apartments in one go? Would it feel like a TOTO-striking moment for whoever’s closing the deal? Nerve-racking because of the quantum and insane money involved?

Possibly a bit of both.

“Imma go buy a few apartments now…”

Over the past few years, there have been several such “moments” which saw a super-wealthy buyer (or a family) purchasing multiple apartments within the same development. These purchases are usually a stack of apartments on the same floor or several levels together.

For foreigners, buying multiple properties at once also means paying a hefty Additional Buyer’s Stamp Duty (ABSD) – 30 per cent on each property based on Dec 2021’s cooling measures. This is above and beyond the Buyer’s Stamp Duty (BSD).

 

While most multi-property purchases by a single buyer are often private, we do have a list based on news from the past:

 
Date Development District Tenure TOP Total number of units No of units bought Room types Floor levels Nationality Total area (in sqft) Price Average per square foot (psf) price Notes
June 2022 Draycott Eight D10 99 years 2005 136 22 21 four-bedroom apartments (around 2,900 sqft each) and a duplex penthouse (4069 sqft) N/A Indonesian 65401 $168m $2570 Buyer is understood to be an Indonesian family. Due diligence stage when reported in June
June 2022 Canninghill Piers D6 99 years 2026 696 20 6 three-bedders (1,259 sqft each), five three-bedders (1,130 sqft) and nine four-bedders (1959 sqft) various, from 6th to 23rd Chinese 30835 $85m $2757 It was reported that the buyer was considering buying 10 more units
March 2021 EDEN D10 Freehold 2019 20 20 Four-bedroom units with private garden (3,035 sqft each) Entire condo Taiwanese 60700 $293m $4827 Owner was reported to be the Tsai family of Want Want China Holdings
Feb 2020 Le Nouvel Ardmore D10 Freehold 2014 43 Two 4-bedroom units (each floor has 2 units – one that’s 3843 sqft and another that’s 3821 sqft) High-level Chinese and Singaporean 7664 $31.81m $4150 Man holding Chinese citizenship and a Singaporean woman (purchasing as a trustee for a beneficiary, likely a child)
Feb 2020 Ritz-Carlton Residences D9 Freehold 2013 58 Two Three-bedroom units (each floor has two units at 2831 sqft each) Mid-level Chinese citizens who are Singaporean PRs 5662 $20.28m $3582
Jan 2020 Le Nouvel Ardmore D10 Freehold 2014 43 Two Four-bedroom units (each floor has two units – one that’s 3843 sqft and another that’s 3821 sqft) High-level Singaporean and US citizen 7664 $33m $4,306 Singaporean woman and US-citizen husband bought a unit each
June 2016 Ardmore 3 D10 Freehold 2015 84 Three Three-bedroom units (1744, 1776 and 1787 sq ft) Mid-level N/A 5307 $16.97m $3198 All three were on the same floor and purchased on the same day, presumably by the same buyer

Reasons for their purchases

Seriously, it’s really none of our business to butt into the lives of ultra-high-net-worth individuals (UHNWIs), power couples or conglomerate families who buy multiple properties in the same development at once.

But we’ve come up with a few reasons why some do:

  • They plan to lease out all or some of the units for rental yield since these developments are in a centralised area and are usually in high demand.
  • Splitting up purchases of adjoining units between different family members may result in savings in additional buyer’s stamp duty (ABSD). (For example, husband and wife from different nationalities).
  • As there are restrictions to owning landed properties, some UHNWIs, being foreigners, look for large, non-landed residential properties (usually above 6,000 to 8,000 sqft) with at least five to six bedrooms
  • Buying units on the entire floor or over several levels allows them to amalgamate units for the space and privacy they need. Not only that, there aren’t that many available penthouses or new launch big units that may suit their specific needs in prime districts or the Core Central Region (CCR).
  • Some buyers prefer buying entire units on the same floor as it maximises space efficiency in terms of the usable areas such as the lift lobby and corridor (rather than buying across different levels).
  • Some buyers don’t want nosy neighbours or prefer not to bump into strangers when getting home.
  • Some developments, like The Ritz-Carlton Residences, have two mirror-image units on the same floor. The two can be amalgamated by knocking down a common wall in the living room, creating a mega-single-floor apartment.
  • Some buyers just want their entire multi-generational family to live under the same roof as part of an enclave. The exclusivity provides the family with peace and quiet in a bustling area like Orchard Road but also secures a home and inheritance for their future generations.

Bulk buyers in the past

Beyond individual buyers or families buying multiple properties at once, there have also been situations in the past when veteran property buyers stepped in to bulk buy residential properties to aid a developer to avoid the Qualifying Certificate penalties.

While most of us are aware of the new 35 per cent ABSD on developers, a QC is a condition imposed on foreign property developers. These developers are defined as “foreign” if they have non-Singaporeans as directors as well as shareholders.

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This technically mean listed development companies are “foreign” since foreigners can own their shares.

Anyway, QC stipulates that development must be finished in five years and that all units must be sold within two years of completion.

If the developer fails to fulfil these conditions, it needs to pay extension charges between eight per cent to 24 per cent of the land purchase price based on whether it’s for the 1st, 2nd or 3rd and subsequent years.

This is why in the periods between 2013 and 2017, several renowned developments were affected by QC, namely The Interlace, Nouvel 18, Hallmark Residences and iLiv@Grange (which went en bloc and is now the site of the upcoming Grange 1866).

At the time, to avoid QC penalties, some developers were offering bulk discounts at 16-23 per cent or up to $300,000.

In 2017, veteran banker Wee Cho Yaw bought the remaining 45 unsold units of CapitaLand’s 55-unit The Nassim for $411.6m (a bulk discount of around 18 per cent) through his private real estate arm Kheng Leong.

The deal valued the property at $407.2m or $2,300 per sqft.

Other individual buyers who stepped up and bought some of the units at The Nassim included Sigid Wonowidjojo and his relative (his family controls Indonesia’s cigarette brand Gudang Garam).

If Wee had not purchased the remaining 45 unsold units by Aug 2017, CapitaLand would have had to pay a hefty $9.3m QC penalty in the first year.

Thankfully, much to the relief of most housing developers in Singapore, a revised 2020 law now allows a publicly listed housing developer to be QC-exempted if it has a substantial connection to Singapore.

Phew…

This article was first published in 99.co.

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