Demand for golf club memberships in Singapore has slowed, even as prices at some clubs have fallen by as much as 25 per cent. This follows the Government's decision to reacquire land from several country clubs.
Membership fees at more than half of the 11 private clubs have dipped. And because of reduced demand, two established brokerage companies have handled fewer transactions in the past year.
This comes after the Ministry of Law's announcement last February that a number of land leases would not be renewed beyond their respective expiration dates and portions of existing golf courses would be earmarked for other use.
Keppel Club has been hit hard after it was confirmed that its 44 hectares of land will be taken over for a housing development by 2021.
With six years left and no alternative site for relocation, the 111-year-old club has seen its membership price slashed from $16,000 last January to its current $14,000. In 2007, it was valued at $43,000.
The same can be said of the 27-hole Orchid Country Club (OCC) in Yishun, whose value in January 2014 has been slashed by a quarter to its current $30,500 amidst uncertainty about its future.
Its present lease expires in 2023 and the authorities will not offer OCC an extension beyond 2030.
The situation has led to less interest from those dreaming of joining an exclusive club, noted broker Fion Phua from Tee Up Marketing The veteran agent handled 83 transactions in 2014, almost a fifth less than the previous year.
It was a similar tale of caution from Lee Lee Langdale of Singolf, which has negotiated club membership deals since 1991.
She said: "The market is quite soft now as there's still a lot of uncertainty even at those clubs that have long leases as people are waiting to see how much the top-up fees are for members.
"This means they have to factor this into their budgets before they decide to commit and buy."
Currently, the 18 golf courses in Singapore occupy about 1,500 hectares, or 2 per cent of the country's total land area. Most are on 30-year leases that expire between 2021 and 2030.
To extend these permits until the new dates established by MinLaw, which is the guardian of state land, clubs may pass on some costs onto their members.
However, Langdale noted a recent trend of young and affluent clients under the age of 30 taking advantage of the falling prices.
These are keen golfers who do not see club memberships as an investment but want to maximise their playing time on the fairways.
That was the motivation for 28-year-old Zi An, who works in the banking industry, to join Tanah Merah Country Club (TMCC) late last year.
The 20-handicapper had been paying guest weekend green fees, which are usually between $200 and $400 per 18-hole round, at various clubs across the island for several years.
He said: "I play once a week and I did my sums and felt that it was more worth it this way and I would save in the long term. With the extension of the lease at TMCC, that's 25 years of golf ahead for me."
The 36-hole facility is one of a minority of clubs that have managed to buck the trend. It has seen its price rise from $118,000 to $123,000, thanks in part to having been offered an extended lease until 2040.
It may have had to redesign its Garden course, which has hosted world-class events like the HSBC Women's Champions tournament, after 10 hectares was gazetted for the planned expansion of Changi Airport but has managed to maintain its appeal, said general manager Kok Min Yee.
"The certainty of a long lease has allowed us to make plans and develop our property. We are looking to renovate the Tampines course into a championship one.
"Once the general public can see all these projects are on stream, I'm sure there will be more interest in our club in the future."
Reflecting that optimism are members of premium clubs like Sentosa Golf Club (SGC), which is embarking on a multi-million dollar project to upgrade its Tanjong course into one fit to host a top international tournament similar to its award-winning Serapong sister course.
The move has led its members to expect the price of admittance to SGC to rise sharply after news of the overhaul broke last Wednesday.
Membership at Sentosa once broke the $300,000 ceiling in 2007. It is currently at $228,000, the lowest since June 2009.
Said businessman Vernon Khoo, an SGC member for 12 years: "The club is well run, our lease is secured and we will have two world-class courses by next year. These factors will only strengthen our position."
Between the 11 private clubs, there are about 30,000 members who hold an estimated $3 billion worth of golf club memberships.
It is a lucrative industry that despite its current slump should eventually rebound, said Phua, who remained bullish about the game's appeal even as endurance sports like cycling and running are gaining in popularity amongst the affluent.
"Golf is still the main way for a lot of businessmen to entertain clients, discuss and sign deals. You can't give someone a bicycle or tell him to go trekking with you and talk business," she said.
While brokers do not expect major shifts to the market this year, they were confident that the reliable and regular demand for golf in Singapore would see the tide turning in the future.
Or as Phua puts it: "Just because you close a few courses doesn't mean the number of golfers also drops. There will just be more golfers on the streets looking for a club to play in."
This article was first published on Jan 25, 2015.
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