Interest in Sentosa Cove has translated into sales — not just that of the 99-year leasehold condominium units, but the leasehold waterfront bungalows as well. Word on the street is that a bungalow at Cove Grove — with a 270-degree view of the waterway and owned by Ezra Holdings founder and chairman Lee Kian Soo — has been sold.

The house at Cove Grove owned by Ezra’s Lee family is said to have been sold

When the property was first put on the market for sale by expression of interest a year ago, the price tag was $26 million, or $2,258 psf. According to market sources, there were many parties vying for the property. However, news that Ezra had filed for Chapter 11 bankruptcy protection on March 18 has led to offer prices dropping in recent weeks to $16 million to $17 million — about $10 million below Lee’s initial asking price.

Last October, the Lee family reportedly sold a Good Class Bungalow on Windsor Park Road for $21.8 million. The GCB sits on a freehold land area of 20,387 sq ft, which means the sale price translated to 1,070 psf. Lee is believed to have purchased the property for $5.9 million, or $288 psf, in September 2004.

Turning point

The fortunes of Sentosa Cove bungalow owners are about to change, says Bruce Lye, managing partner of SRI. Lee’s bungalow at Cove Grove is not the only one believed to have been transacted recently. Lye is said to have brokered the sale of two other bungalows in the waterfront residential enclave earlier last week.

One of them is a bungalow on Cove Drive, which fetched $10 million, or $1,348 psf. It sits on a land area of 7,420 sq ft and overlooks the Tanjong Golf Course. The original owner purchased the land parcel from Sentosa Cove, a private company set up by Sentosa Development Corp, to undertake the sale of land parcels when they were first put up tender.

The buyer of the five-bedroom bungalow is said to be a Singaporean, who purchased it for his own use.

A bungalow at Cove Drive which overlooks the Tanjong Golf Course was sold for $10 million, or $1,348 psf, recently

Another bungalow, on Ocean Drive, changed hands for $12.5 million. The 7,381 sq ft site fronts the sea and the land was purchased by the original owner to build the five-bedroom home, which comes with a rooftop pool. The recent buyer is also said to be Singaporean, buying the property for owner-occupation.

Improved sentiment “There has been a significant increase in interest in Sentosa Cove over the past month,” says Lye. This time, the interest has translated to actual deals, unlike in the past two years, during which, despite expressions of interest, potential buyers were reluctant to commit to a purchase, he observes.

A bungalow sitting on a 7,381 sq ft site at Ocean Drive with sea-front views changed hands for $12.5 million

Lye attributes the recent deals to the improvement in buyer sentiment following the government’s easing of property cooling measures, in particular, the reduction in the seller’s stamp duty (SSD) and holding period for residential property.

Prior to March 11, those who sold their residential properties within the first to fourth year of purchase were subjected to SSD rates of 16%, 12%, 8% and 4% respectively. The SSD has been cut to 12%, 8% and 4% for the first to third year of purchase.

Following the recent Sentosa Cove deals, several other bungalows have surfaced on the market for sale. One of the properties Lye is marketing is a bungalow on Paradise Island. Developed by Ho Bee Land and completed in 2009, Paradise Island has 29 villas. All its double- storey units were designed with private berths for luxury boats, water views and at least five to six en suite bedrooms.

The villa at Paradise Island that Lye is marketing sits on a land site of 8,170 sq ft and has an asking price of $13.8 million ($1,689 psf). The existing owner purchased the property in a sub-sale for $13 million ($1,591 psf) in October 2007. The previous owner bought the villa from the developer for $8.8 million ($1,078 psf) when the project was launched in April 2007, and made a profit of $4.2 million in just six months.

A double-storey villa on Paradise Island is on the market for $13.8 million

Pick-up in transactions

Based on caveats lodged with URA to date, the volume of bungalow transactions in Sentosa Cove peaked in 2010, with a total of 54 units sold that year. By 2013, the number of transactions had shrunk to a third of the peak volume, with just 18 units changing hands. Between 2014 and 2016, the average number of bungalow transactions hovered around four.

However, last August saw the first bulk sale of luxury bungalows at Sentosa Cove. That was when Vincent Ong and Leslie Lim, the co-founders of privately held property group Evia Real Estate, bought up the 10 remaining bungalows on Pearl Island developed by Ximeng Land. The average asking price of $1,500 to $1,600 psf for the waterfront villas reflected a bulk discount of 22%, compared with prices ranging from $1,904 to $2,228 psf for transactions made between September 2010 and October 2013.

The August 2016 transaction was carried out via a sale of shares in Ximeng Land, the developer of the 19-bungalow Pearl Island, and is therefore not reflected in the URA caveat records. Ong and Lim are believed to have purchased the bungalows as an investment, and plan to lease them out.

For the first three months of 2017, there was only one bungalow transaction in Sentosa Cove, at Lakeshore View. The property, which sits on an 11,270 sq ft site, fetched $21.3 million ($1,886 psf), according to a caveat lodged on March 1. Bungalows at Lakeshore View have views of greenery, the golf course, a manmade lake and the sea beyond.

However, with the three recent deals done, Lye is optimistic that Sentosa Cove is on the verge of a revival.

This article appeared in The Edge Property Pullout, Issue 774 (Apr 10, 2017) of The Edge Singapore.