China has empty cities, Sinkapore has empty condos

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Luxury homes left empty in quiet market

Melissa Tan
The Straits Times
Monday, Jun 02, 2014

SINGAPORE - Completed luxury homes without owners are gathering dust in exclusive pockets of the city centre as developers hold off selling them in a moribund luxury market.

In the Ardmore Park area off Orchard Road, for instance, an entire condominium project has been completed but not launched for sale. Other projects nearby could soon face the same fate.

While the residential property market in general has slowed down markedly, the top end has been the hardest hit.

Experts point to recent rounds of property market cooling measures that have driven away many buyers in the high-end segment.

"Wealthy property buyers are the most savvy investors... Many are not in a hurry to buy luxury properties," said R'ST Research director Ong Kah Seng.

He added that developers may find it feasible to turn their upmarket developments into serviced apartments, though that could incur hefty additional costs, such as beefing up security.

"Another option is to massively slash prices and sell the units in bulk to mega investors," he said.

One recently built condo that has not been launched is the 58-unit Ardmore Residence, according to Urban Redevelopment Authority (URA) data.

The freehold development by Pontiac Land received its temporary occupation permit (TOP) in the second quarter of last year.

It sits on the site of the old Pin Tjoe Court, which Pontiac Land bought through a collective sale for $201 million in 2006, or $1,358 per sq ft (psf) of potential gross floor area. Units in the project are large, at about 3,300 sq feet on average.

A Pontiac Land spokesman said the units are being leased out at around $25,000 a month and that the developer has traditionally preferred to lease out its projects rather than sell them.

Nearby, the 34-unit Sculptura Ardmore project developed by SC Global has also not been put on the market.

However, it still has some time - it is still under construction and is expected to get its TOP this year. Prices for its units had previously been expected to start from $5,000 psf.

Several streets south of the Ardmore Park district, the 30-unit iLiv @ Grange project in Grange Road also has yet to be formally launched, according to URA data. The freehold project got its TOP in the fourth quarter of last year.

Its developer Heeton Holdings first unveiled the project in 2010 with the intention of selling it at above $3,000 psf.

Heeton had bought the site, which formerly housed Grange Court, for $72.8 million, or more than $1,700 psf per plot ratio (ppr) in 2007.

But it was said last year to be looking to bulk-sell the units at $2,200 to $2,300 psf to a single buyer, according to media reports.

Heeton has two years after TOP to finish selling all the units in the project, under Qualifying Certificate (QC) conditions.

Analysts said the QC rules were turning up the heat on some high-end developers to clear their unsold stock.

The rules give developers up to five years to finish building a project and two more years to sell all the units. They are not allowed to rent out unsold units.

Heeton is bound by QC rules because it is a listed company, but Pontiac Land is privately held.

Developers whose shareholders and directors are not all Singaporeans have to get a QC to buy residential property for development. This is imposed to control foreign ownership of land here.


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