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Sentosa Cove bungalow market thaws
THERE has been an improvement in bungalow deals in Sentosa Cove lately, after a slow start this year.
A bulk sale for the remaining 10 bungalows on Pearl Island, one of the five man-made islands in the waterfront housing district, has been entered into. The transaction, via a sale of shares in the company that developed the 19-villa project, values the balance 10 bungalows at S$120-130 million, which works out to S$1,500-1,600 per square foot on land area, The Business Times understands. The transaction is subject to the approval of Sentosa Development Corporation (SDC).
The buyer is Singapore-incorporated SRIF Pte Ltd, which is fully owned by Leslie Lim and Vincent Ong, the co-founders of Evia Real Estate. However, Evia is not involved with the transaction. SRIF is buying over the entire equity of Ximeng Land (S) Pte Ltd, the developer of Pearl Island. Ximeng is controlled by a Liu family from Beijing.
In a separate deal, an IT entrepreneur on the China rich list is understood to be the party who is picking up a bungalow along Cove Way. The price is S$16.5 million, or S$1,871 psf on land area of 8,819 sq ft - much lower than S$23 million the seller is said to have sought for the property a few years ago.
The buyer, Pang Shengdong, is a Chinese citizen and Singapore permanent resident (PR); he is understood to be vice-chairman of Shanghai 2345 Network Holding Group Co, an IT company listed in Shenzhen.Mr Pang is also a shareholder in a few Singapore companies including Zwoo Mobile and SCI Ecommerce. He is in his late 30s.
The bungalow that Mr Pang is believed to be purchasing along Cove Way spans two storeys with an attic and basement. It has five bedrooms and a pool. The basement houses an entertainment area and a garage. The house is on a 99-year private leasehold tenure starting August 2007.
This is the first caveat lodged for a bungalow purchase in Sentosa Cove this year. Market watchers hope news of the deals will trigger more activity in the precinct. "Sentosa Cove bungalows now present good opportunities for those seeking value buys," said Steve Tay, vice-president (resale) of CBRE Realty Associates.
The S$1,871 psf at which the Cove Way bungalow is being sold is higher than the previous transaction on the same street; in October 2013, a bungalow two doors away fetched S$1,716 psf. That said, the latest sale is lower than the S$2,016 psf, S$2,119 psf and S$2,353 psf that three bungalows on Cove Way went for in February, August and October of 2010 respectively during the heyday of the Sentosa Cove bungalow market. But there was also another sale on the same street in February 2010 at a much lower price of S$1,783 psf.
On Pearl Island, the S$1,500-1,600 psf that Mr Lim and Mr Ong are believed to be paying for the 10 villas also reflects a discount to the earlier nine villas in the project sold by the developer, Ximeng Land. Caveats have been lodged for only seven of these transactions between September 2010 and October 2013 at S$1,904-2,228 psfor absolute prices of S$15-27 million. Another two villas, for which buyers did not lodge caveats, are understood to have been sold by Ximeng Land last year and in Q1 2016 at S$14 million-plus each, reflecting S$1,800-1,850 psf.
When contacted, Mr Lim declined to comment on the price that he and Mr Ong are paying for the 10 villas, citing confidentiality reasons. He confirmed, however, that an entity owned and controlled by the two men has entered into a sale and purchase agreement with the owners of the development company of Pearl Island. "This transaction is subject to approvals including from SDC." SDC is the parent of Sentosa Cove Pte Ltd (SCPL), the master developer of the waterfront district and which also sold land parcels in the precinct.
"This will be an outright sale, with no profit-sharing arrangement with the seller," said Mr Lim when asked by BT.
Once their acquisition is successful, Mr Lim and Mr Ong intend to spruce up the asset, riding on Pearl Island's idyllic waterfront living ambience. "I'm exploring enhancements to the quality of living there both in terms of softscape and interior, but more importantly by providing access to premium services such as concierge, cleaning, food delivery, etc." The intention is to lease out the units.
Ximeng Land developed the 19-villa project on a site with a 99-year leasehold tenure starting March 2008. The project was completed in 2012.
The company is owned by the majority shareholders of Ximeng Asset Holdings Co, the parent company of Beijing Ximeng Real Estate Co, a developer of luxury building projects in Beijing, Yantai and Jinan, according to a December 2007 news release announcing SCPL's award of Pearl Island to Ximeng Land. A company search showed that Ximeng Land's shareholders are Chinese citizens Liu Yangang, Liu Yanguo and Liu Yanqiang.
The 10 remaining villas have land areas of 6,000-plus sq ft to 11,000-plus sq ft. Each villa spans two storeys in addition to having a roof terrace and a basement - and comes with a private home lift. There are five to six en suite bedrooms. Each villa has its own private berth and a swimming pool.
The S$1,500-1,600 psf price for the 10 remaining villas would be below break-even cost for Ximeng, which paid S$1,350 psf for the site. Foreign developers who bought residential sites on Sentosa Cove do not require a Qualifying Certificate, which stipulates deadlines to finish selling all the residential units in a project. Still market watchers reckon Ximeng Land may be doing a bulk sale for the balance Pearl Island villas as it may be losing patience.
In terms of sales, going by caveats data, there were four bungalow deals in Sentosa last year, up from three in 2014 but lower than the 18 deals in 2013. The best year was 2010, with 54 transactions. Mr Tay said a confluence of government policies are behind the slowdown in bungalow deals on Sentosa. For foreign buyers, the 15 per cent additional buyer's stamp duty is the key deterrent. "Moreover, the Long-Term Visit Pass (LTVP) scheme for Sentosa Cove residents seeking long-term stay in Singapore was terminated from June 10, 2014 - although those who already had their passes issued before this date are eligible to apply for a renewal LTVP of up to five years, so long as the residential property is owner-occupied."