More luxury condos in the prime districts could be put up on the market for launch or relaunch as the clock ticks away for developers who applied for a qualifying certificate (QC) when they purchased a collective sale so back in the property boom of 2005-2007. One example is listed developer OUE Limited, which is planning to relaunch OUE Twin Peaks sometime early next month. The 99-year leasehold condo has twin 35 storey towers containing a total of 462 units located at the junction of Leonie Hill Road and Grange Road in prime district 9.
The project is located on the site of the former Grangeford, an ageing 99-year leasehold condo that OUE Ltd had purchased en bloc for $1,801 psf per plot ratio at the peak of the last property boom in June 2007.
The 462-unit OUE Twin Peaks was completed in February this year,
and as at end-September, 70 units have been sold
Under the conditions of the qualifying certificate (QC), a foreign developer which includes most of the listed companies, has to complete the development of a project within five years, and has to sell out all the units within two years after Temporary Occupation Permit (TOP). If they do not, they will be subjected to extension charges of 8%, 12%, 16% and 24% for each subsequent year after that.
According to UOB KayHian in a research report published on October 8, extension charges for OUE Twin Peaks will amount to $42.4 million in the first year, $84.8 million in the second and $127.3 million in the third year of extension. The project was completed on February 24 this year. This means OUE Ltd has to sell all the units in the project by February 24, 2017. As at end September, only 70 of 90 units launched has been sold.
To increase the chances of selling out the units within the two year time frame, OUE has appointed five real estate agencies for the upcoming relaunch of the project, namely CBRE, DTZ, SQFT Global, Savills and SLP International.
Units in Tower 2 of OUE Twin Peaks were released for sale in August 2010. At that time, selling prices ranged from $2,750 psf to $3,200 psf. The project boasts units that will be fully furnished with furniture pieces by world renowned designers such as Hans Wegner, Charles & Ray Eames and Tom Dixon.
The most recent transaction at OUE Twin Peaks was the sale of a 1,399 sq ft three-bedroom unit on the ninth floor of Tower 2 for $3.7 million ($2,644 psf), according to a caveat lodged with URA Realis on October 12. The buyer is believed to be a mainland Chinese. The price of $2,644 psf for the ninth floor unit is lower than the $2,984 psf achieved in September last year for a third floor unit of 1,399 sq ft that was sold for $4.18 million, based on caveats lodged then.
OUE is expected to release remaining units in Tower 2 for the re-launch, scheduled for November 10. The project has one-bedroom units of 549 sq ft, two-bedroom units of 1,055 sq ft and three-bedroom units ranging from 1,399 to 1,604 sq ft. Absolute prices could start from $1.5 million, $2.7 million and $3.8 million, respectively, for one-, two- and three-bedroom units. According to sources, the units are expected to be priced in line with the latest transaction price of around $2,600 to $2,700 psf.
Meanwhile, OUE Ltd is believed to be in talks with several parties for the bulk sale of all the 231 units in Tower 1 of OUE Twin Peaks.
The luxury condo located nearest to OUE Twin Peaks is Grange Infinite, a single 36 storey tower containing 68 units. The freehold Grange Infinite saw a bulk sale of 12 units last year to Indonesian tycoon Tahir for a total of $70 million. This translated into or an average of $2,050 psf for the 11 four-bedroom units of 2,560 sq ft to 2,700 sq ft each and $1,950 psf for the 6,039 sq ft junior penthouse. Based on caveats lodged, transactions for the four-bedroom units on the high floors of Grange Infinite fetched from $2,400 psf to $2,510 psf from January to June 2014.
As units at OUE Twin Peaks are sold fully-furnished, this should attract investors looking at immediate rental income, says Samuel Eyo, managing director of Singapore Christie’s International Real Estate. Based on the listings by property agents, one-bedroom units at Twin Peaks can command rental rates of $4,000 to $4,500.
Leasehold properties within 500m of OUE Twin Peaks
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This article appeared in the City & Country of Issue 701 (Nov 2, 2015) of The Edge Singapore.