After a three-year slump, signs of life are returning to the property market in Sentosa Cove. In property auctions this month, three condominium units in the waterfront enclave have been listed for sale. Two are owners’ sales, and only one is a mortgagee (or bank’s) sale.
The sole mortgagee sale this month is a 1,227 sq ft, two-bedroom unit at The Residences at W Singapore Sentosa Cove. The unit is situated on the fifth floor of the six-storey, 228-unit luxury condo completed in 2012. The Residences at W is part of the Quayside Collection developed by City Developments Ltd, and includes the Quayside Isle F&B and retail podium as well as the W Singapore Hotel.
In December 2014, CDL teamed up with US investment giant Blackstone Group and Malaysia’s CIMB Bank to monetise the assets in the Quayside Collection through a $1.5 billion profit participation securitisation exercise. In its cash flow projections, CDL and its partners had assumed that the residential units at The Residences at W would be sold at no less than $2,400 psf at the end of the five-year term of the PPS.
The 1,227 sq ft, fifth-floor unit at The Residences at W was put up for auction on May 25 by Colliers International. The unit is said to have a view of One°15 Marina. It had an indicative price of $2.53 million ($2,062 psf), which already reflects a markdown of about $1 million from the original purchase price seven years ago. The previous owner had purchased the unit in 2010 for $3.55 million ($2,891 psf).
The unit was one of 25 sold by the developer from April 2010 to October 2014 at an average price of $2,736 psf, according to caveats lodged with URA Realis.
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Oceanfront tops transactions at Sentosa Cove
CDL is also the developer of The Oceanfront, the landmark high-rise condo development — one of just two — in Sentosa Cove. The 264- unit project was completed in 2010, and offers views of the sea and the marina.
A 1,894 sq ft, three-bedroom unit on the eighth floor of one of the 15-storey towers at The Oceanfront debuted at Edmund Tie & Co’s property auction on May 24. The opening price was $2.65 million ($1,399 psf). As there were no bids, the property was withdrawn. The opening price is below even the owner’s purchase price of $3.3 million ($1,742 psf) in January 2010, according to a caveat lodged then.
The three bedroom unit is currently tenanted at $5,600 per month, with a two-year lease that will end in June 2018. The gross rental yield works out to 2.53%. Given the indicative price of the unit at $1,399 psf, it attracted a lot of interest, says Joy Tan, head of auction at Edmund Tie & Co, who is marketing the property.
The latest transaction at The Oceanfront, done earlier this month, was also for a three-bedroom unit, but slightly smaller at 1,711 sq ft and located in a different tower. The unit fetched $2.85 million ($1,665 psf). The previous owner paid $2.77 million ($1,618 psf) for the unit a decade ago in May 2007. The first owner paid $2.1 million ($1,228 psf) for the unit when the project was launched in July 2006.
This year has seen at least half a dozen transactions at The OceanFront so far. Many of those who sold are either the second or third owners. For instance, in April, another 1,711 sq ft, three-bedroom unit in the adjacent tower was sold for $2.6 million ($1,519 psf). The previous owner paid close to $2.4 million ($1,400 psf) for the unit in a sub-sale in December 2006. He was the second buyer; the first had purchased the unit just four months earlier in August 2006 for $2.26 million ($1,321 psf) before flipping it.
The same scenario was played out at a 2,067 sq ft, four-bedroom unit in another block at The Oceanfront. The unit fetched $3.6 million ($1,742 psf) in April this year. It was purchased for $3.93 million ($1,900 psf) a decade ago. Prior to that, the unit was purchased from the developer for $3.13 million ($1,516 psf) in August 2006.
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The Berth by the Cove turns 10
The first condo development in Sentosa Cove to be launched was The Berth by the Cove by Ho Bee Land, a first mover in the waterfront enclave. The 200-unit project was launched in late 2004, and completed in 2007. As such, it is already 10 years old.
A unit at The Berth by the Cove will be put up for auction by ERA on May 31. The 2,131 sq ft, three-bedroom unit faces the sea. The unit is currently tenanted, and the owner has indicated a price tag of $2.55 million ($1,197 psf). The owner purchased the unit 12 years ago when it was launched at $1.6 million ($758 psf). Back then, the average transacted price for The Berth by the Cove was $830 psf.
The latest transaction at The Berth by the Cove was for a 1,658 sq ft, three-bedroom unit on the fourth floor of another block. It was sold for $2.2 million ($1,327 psf) in March 2017, according to a caveat lodged with URA Realis. The unit was purchased for $1.44 million ($871 psf) in December 2004.
Transaction volume almost doubles
Transactions in Sentosa Cove are picking up. In the first five months of 2017, there were 21 sales, of which six were bungalow deals (see table). The most recent was the $14.5 million sale of the house at Cove Grove that belonged to the founder and chairman of Ezra Holdings, Lee Kian Soo. The remaining 15 transactions were for condo units.
This reflects a 75% y-o-y increase in transactions compared with the first five months of 2016, when there were only 12 deals. Of the 12 transactions recorded by URA Realis, only two were for landed properties — both were terraced houses, one at The Berthside and the other at Ocean Drive. No bungalows were sold in the first five months of last year.