‘Copper House’ loses some of its lustre

By
/ EdgeProp Singapore
|
May 24, 2019 7:00 AM SGT

SINGAPORE (EDGEPROP) - The price of $32 million achieved at the trophy home on Sentosa Cove is a reflection of market sentiments and sellers adjusting prices on the back of property cooling measures introduced last July.

One of the most visible houses on Sentosa Cove, dubbed “Copper House”, changed hands last month for $32 million ($1,773 psf), according to a caveat lodged on April 16. The price is $16 million or 33% below the original asking price of $48 million when the property debuted on the market in mid-2016.
“The owner had wanted to sell the house for $48 million initially,” concedes Steve Tay, senior associate vice president of List Sotheby’s International Realty (List SIR) who brokered the sale. “But following the latest property cooling measures last July, he realised that the ABSD [additional buyer’s stamp duty] is now much higher, especially for foreign buyers. It has risen to 20%, bringing total stamp duty to 24%. As such, he decided to lower his asking price.”
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The owner of the Copper House is Singaporean magnate David Loh, a former stockbroker and prolific investor who is also a non-executive director of Centurion Corp. Loh also owns a Good Class Bungalow (GCB) in Cluny Hill, a prestigious estate near the Singapore Botanic Gardens in prime District 10. He is said to have redeveloped the GCB at Cluny Hill which was recently completed.
SENTOSA COVE - The dining and living area as well as the customised wine cellar that can accommodate 2,000 bottles are on the second level of the house (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The dining and living area as well as the customised wine cellar that can accommodate 2,000 bottles are on the second level of the house (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Billionaire’s relocation

As Loh intends to move with his family to the Cluny Hill GCB, he decided that it was time to let go of the Sentosa Cove property. “He and his family have enjoyed the house on Sentosa Cove for the past seven years,” says Tay. “And he didn’t want to leave the house vacant, so he felt it was time to sell.”
KH Tan, managing director of Newsman Realty, who represented the seller in the deal, was appointed exclusive agent of Copper House more than a year ago. The asking price had already been adjusted to $42 million then. “He is a motivated seller,” says Tan.
List SIR’s Tay represented the buyer, Taiwanese billionaire Chen Hsu. Chen is the co-founder of Hsu Fu Chi International, which is based in Dongguan, China, and manufactures various confectionery products including biscuits, chocolates and jellies. Chen had sold a 60% stake in his company to Nestle in 2011 for about $2.1 billion, but still retains the remaining stake.
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Considered one of Taiwan’s richest, Chen, who is now in his mid-60s, is planning to retire in Singapore where he is a permanent resident. He is also planning to relocate his family to Singapore.
“He is buying the house for his own stay and hopes to spend more time in Singapore with his family as he likes the security, environment and lifestyle that Sentosa Cove offers,” says Tay. “He says this is his dream retirement home where he plans to relax and take leisurely walks with his loved ones.”
Chen had visited the house several times before deciding to purchase it.
“It was a discreet off-market deal,” says Tay, who was involved in the negotiations between both parties. “The buyer is happy with the price, and the owner is happy to be selling to someone who will appreciate the house.”
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SENTOSA COVE - The family room on the first level with a view of the swimming pool and the sea (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The family room on the first level with a view of the swimming pool and the sea (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Epitome of a trophy home

The Copper House is the epitome of a trophy home: It is one of fewer than 10 bungalow plots in Sentosa Cove that are over 18,000 sq ft and is the result of an amalgamation of two adjacent plots, says Samuel Eyo, managing director of Lighthouse Property. Eyo was the original exclusive agent for the property three years ago, when the price tag was $48 million.
The Copper House sits on a plot of 18,052 sq ft at Cove Drive and has a 41.4m frontage with an ocean view. The house comes with a basement garage that can fit 10 supercars. It has a 10,000 sq ft rooftop deck for entertainment, a customised wine cellar for 2,000 bottles and a private lift. While the living and dining area is on the second level, the six en suite bedrooms, a spa, sauna, private gym and putting green are located on the first level. The master suite and four other bedrooms, as well as the family room, have direct access to the swimming pool and garden on the first level.
“A distinctive property like the Copper House always draws interest,” says Tay. He sees buyers returning to Sentosa Cove recently. However, he notes that the latest property cooling measures that came into effect last July 6, have widened the price gap between buyers and sellers. “Sellers therefore have to be more realistic with their asking prices,” he adds. “Buyers recognise that prices in Sentosa Cove have stabilised, with the cooling measures in place, and they can take their time to find the right property.”
SENTOSA COVE - Bedroom with a view and direct access to the swimming pool (Credit: Samuel Isaac Chua/EdgeProp Singapore)
Bedroom with a view and direct access to the swimming pool (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Deal spurt

Tay recently sold another bungalow, this time at Ocean Drive, for close to $15 million, although the caveat has yet to be lodged. The bungalow sits on a plot of about 9,880 sq ft. It is described as an “arty, designer house” with three bedrooms. The buyer is said to be a Chinese national. Tay is also in the midst of negotiating the sale of another trophy property at Sentosa Cove “in the $30 million range”.
The resurgence of buying interest in Sentosa Cove bungalows could be partly attributed to average prices having fallen by some 30% from its peak in 2012-2013, notes Han Huan Mei, List SIR director of research. Transactions fell to just four units per annum from 2014 to 2016 following the last round of property cooling measures in 2013, which saw a hike in ABSD, seller’s stamp duty and the introduction of the total debt servicing ratio (TDSR) loan framework. The number of bungalows sold, however, jumped to 15 in 2017, and 11 in 2018.
The momentum of sales and price growth continued to pick up steadily in 1H2018 until the new cooling measures came into effect on July 6, notes Han. “The market was quiet for a few months as sellers and buyers took a step back to see where prices were heading.”
When it became clear that prices were not on a downward slide and instead, had stabilised from September to October 2018, “buyers began to re-enter the market looking for fair-value buys”, observes Han.
Most of the potential buyers shopping for a property in Sentosa Cove today are looking at “owner-occupation so that their families can enjoy the unique waterfront lifestyle while holding the property as a mid- to long-term investment asset”, says Han. “For international buyers, Sentosa Cove remains the only address in Singapore that foreigners can purchase and own landed properties.”
Prices were marginally higher in 2018 than in 2017, and are expected to remain stable in the next 12 months, Han estimates.
SENTOSA COVE - BUNGALOW TRANSACTIONS
Credit: URA REALIS, List SIR Research

Significant transactions

A significant transaction in 2018 was a bungalow at Cove Grove which was sold for $33.3 million – the highest transacted absolute price for a Sentosa Cove bungalow since 2013. Rowena Chan, associate vice president of List SIR, was involved in the sale. “The bungalow was able to fetch such a handsome price due to several special and unique attributes – including the land area of 18,555 sq ft, which is a rare find in Sentosa Cove,” she says.
The price translated to $1,795 psf based on land area, which Lighthouse Property’s Eyo says is slightly higher than the $1,773 psf that the Copper House was recently sold at. “It is a reflection of the current market sentiment and the higher stamp duty that buyers are subjected to,” he says.
Another significant sale was that of a bungalow, also along Cove Drive, that was sold in November 2018 for $23.99 million. It translated to $2,515 psf, which is the highest psf achieved for 2018. In January 2019, a bungalow at Cove Drive sitting on a plot of 8,730 sq ft, fetched $32 million ($1,948 psf).
“Bungalow prices at Sentosa Cove currently lean in favour of buyers, and there could be more interest from well-heeled locals and newly-minted permanent residents who are buying their first residential property as they are not affected by the higher ABSD,” says Han.
For instance, the buyer of Copper House, being a permanent resident, will only be subjected to 5% ABSD, as this is his first property purchase in Singapore, on top of a 4% stamp duty. This brings his total stamp duty cost to 9%, and based on his $32 million purchase, that is an additional $2.88 million.
“Only the ultra rich buyers can afford to buy a house of that quantum,” says Lighthouse’s Eyo. “For $2.88 million, you can buy a one- or two-bedroom unit in the prime districts.”
COVE DRIVE - The 10,000 sq ft rooftop entertainment deck at the Copper House on Cove Drive offers panoramic sea views (Credit: Samuel Isaac Chua/EdgeProp Singapore)
The 10,000 sq ft rooftop entertainment deck at the Copper House on Cove Drive offers panoramic sea views (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Capitalising on expansion of IRs, Greater Southern Waterfront

In the long term, the prospects for Sentosa Cove should be positive, says List SIR’s Han. The Sentosa Gateway Tunnel, which was opened in April 2017, allows residents of Sentosa Cove to connect to the mainland directly with greater ease. The latest announcements by the government to expand the tourism offerings from Sentosa and to include it as part of the 2,000ha Greater Southern Waterfront – which stretches from Tanjong Pagar to Pasir Panjang – could potentially enhance real estate values in Sentosa Cove.
List SIR’s Tay agrees. “Over the next five to 10 years, there should be a lot of interest in Sentosa Cove,” he says. “Prices had accelerated too quickly from 2010 to 2013. The property cooling measures in 2013 levelled off transactions and led to softening in prices. And that’s why we saw only four transactions per year from 2014 to 2016.”
Tay adds that this was followed by “a period of price discovery”, when property agents, sellers and buyers were trying to figure out “the real value” of a bungalow on Sentosa Cove.
On top of the URA 2019 Master Plan for the Greater Southern Waterfront, Tay sees interest returning on the back of expansion plans announced by Singapore’s two integrated resorts last month. Marina Bay Sands, for instance, intends to pump in $4.5 billion to add a new entertainment area and a fourth hotel tower. Resorts World Sentosa is also spending $4.5 billion, which will see an expansion of Universal Studios Singapore and the addition of two more attractions, namely Minion Park and Super Nintendo World.
“The two IRs’ $9 billion expansion and the Greater Southern Waterfront Master Plan have certainly revived interest in Sentosa Cove,” says Tay. “Potential buyers see the possibility of long-term capital appreciation when these plans materialise in the future.”
For price trends, recent transactions, other project info, check out these projects' research page: Sentosa Cove, Cove Drive
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