Condo transactions in Sentosa Cove drop 28.9% y-o-y in 2023, while median prices are up 5%

/ EdgeProp Singapore |

January 5, 2024 4:03 PM SGT

The Oceanfront (left) and Cape Royale (centre) are the only two high-rise condo projects in Sentosa Cove (Photo: Samuel Isaac Chua/EdgeProp Singapore).

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SINGAPORE (EDGEPROP) - Over the past decade, the luxury 99-year leasehold condos in Sentosa Cove have faced a tough challenge from new leasehold condos on the main island despite the uniqueness of its waterfront living and resort lifestyle. According to Han Huan Mei, director of research at List Sotheby’s International Realty, the primary reason is that there is no fresh supply to reprice the condo values in Sentosa Cove. “Moreover, property value tends to decline as leasehold tenure depreciates,” she says.

The 200-unit The Berth by the Cove was the first condo to debut in Sentosa Cove. The project is now 18 years old, having been completed in 2006. With a 99-year lease from March 2004, it has a remaining lease of 80 years.

Based on caveats lodged, the latest transaction at The Berth was for a 3,046 sq ft penthouse on the sixth floor that changed hands for $3.25 million ($1,067 psf) in November. The previous owner paid over $2.2 million ($725 psf) for the penthouse in February 2005. When The Berth was launched in November 2004, about 97 units were sold at a median price of $847 psf in the next two months.

Based on caveats lodged, the latest transaction at The Berth was for a 3,046 sq ft penthouse on the sixth floor that changed hands for $3.25 million ($1,067 psf) in November (Photo: Samuel Isaac Chua/EdgeProp Singapore).

The latest condo launch at Sentosa Cove was the largest and one of just two high-rise developments in the waterfront enclave. It is the 302-unit Cape Royale, where units were released for sale on June 30, 2022. Based on caveats lodged, 46 units were taken up at a median price of $2,174 psf as at end December 2022. In 2023, another 40 units were sold at a median price of $2,225 psf, based on caveats lodged as at Dec 31, 2023. According to the developer, a joint venture between Ho Bee Land and IOI Properties Group, over 100 units have been sold to date, although some buyers chose not to lodge a caveat.

The 302-unit Cape Royale was completed in 2013 and units were leased for nearly a decade before they were released for sale in June 2022 (Photo: Samuel Isaac Chua/EdgeProp Singapore).

Cape Royale accounted for about half the condo units sold in Sentosa Cove in 2023, making it the top-selling project in the enclave. This is due to the unblocked views of the sea, the marina and the surrounding area. The condo was completed in 2013 with a 99-year lease from 2008.

At Marina Collection, a 3,272 sq ft, five-bedroom, ground-floor unit fronting the marina changed hands for $5.726 million ($1,750 psf) in November. The 124-unit luxury condo was completed in 2011 and has a 99-year lease from 2007.

In December, a 2,056 sq ft, four-bedroom unit at The Oceanfront @ Sentosa Cove was sold for $3.65 million ($1,775 psf). The previous owner purchased the fifth-floor unit for just under $3.09 million ($1,503 psf) in July 2006. The 264-unit The Oceanfront was completed in 2010 and has a 99-year lease from 2005.

The last transaction at Seascape was for a 2,669 sq ft, four-bedroom unit that was sold for $5.85 million ($2,190 psf) in September (Photo: Samuel Isaac Chua/EdgeProp Singapore).

Meanwhile, a 2,164 sq ft, three-bedder on the first level of the 91-unit Turquoise was sold for $3.38 million ($1,562 psf) based on a caveat lodged in December.

The 228-unit Residences at W Singapore Sentosa Cove saw its first transaction in nine years: the sale of a 1,259 sq ft, two-bedder on the fifth floor for $2.2 million ($1,747 psf) in September 2023. The last transaction was for another 1,259 sq ft, two-bedder on the fourth floor that fetched $3.64 million ($2,891 psf) in October 2014. This was before City Developments launched a $1.5 billion profit participating security investment platnform in December 2014, that included the unsold units at The Residences at W along with Quayside Isle and the W Hotel.

The Quayside Isle, with restaurants, entertainment and a gourmet grocer. The Residences at W Singapore Sentosa Cove across the road saw a two-bedder sold for $2.2 million ($1,747 psf) in September (Photo: Samuel Isaac Chua/EdgeProp Singapore).

Sentosa Cove is considered to be part of the Core Central Region (CCR). Yet, the median price of $2,125 psf achieved for condos at Sentosa Cove in 2023 is closer in range to the prices of new launches in the city fringe or the Rest of Central Region (RCR).

According to List Sotheby’s Han, the luxury condo units at Sentosa Cove are sizeable, with most of the units being three- and four-bedroom apartments with sizes from 1,700 sq ft to 3,000 sq ft. Even two-bedroom units start from 1,200 sq ft. Hence, even though the psf prices may be lower than those of the newer condos on the main island of Singapore, the quantum prices are much higher.

“Foreign buyers are especially attracted to the waterfront living and resort lifestyle offered by Sentosa Cove,” says List Sotheby’s Han. “However, given the hefty 60% ABSD imposed on foreign buyers, condo sellers have to offer more discounts to incentivise buyers to purchase. If prices are attractive enough, discerning local investors will be interested in acquiring a holiday home or investment property for rental income.”

Before the Covid-19 pandemic, in 2019, the proportion of foreign and permanent resident (PR) buyers was above 20% each, making up nearly half of all the buyers, notes Han. During the pandemic (2020–1H2022), the proportion of foreign buyers fell to under 10% when borders closed. However, the proportion of foreign buyers recovered to 16% when Singapore reopened its borders from 2H2022.

In 2023YTD, the proportion of foreign buyers recovered to pre-Covid levels of 22% before levelling off after the hike in ABSD last April. On the other hand, the proportion of PR buyers increased to 32% in 2023, most of whom were buying their first property for owner-occupation and hence were only subject to 5% ABSD.

Condo transactions in Sentosa Cove dropped 28.9% y-o-y in 2023 while total sales value was down 26.1% y-o-y to $382.28 million. Median price, up 29.6% y-o-y to $2,018 psf in 2022, increased by about 5% y-o-y to $2,125 psf based on URA data as at Dec 31, 2023.

Meanwhile, the overall transaction volume of non-landed property in the CCR dropped 20% y-o-y as of Dec 27, 2023, a smaller decline than Sentosa Cove’s 29% contraction. “It could be attributed to fairly consistent support from local buyers who prefer the convenience and proximity to amenities on the main island compared to Sentosa Cove,” says Han.

Although the government has no intention of increasing the residential supply at Sentosa Cove, it continues to develop and enhance Sentosa Island as a tourist attraction. “These ongoing improvements to Sentosa’s amenities and infrastructure will spill over to Sentosa Cove,” Han continues. “In 2024, we expect a gradual recovery in condo sales volume as price correction occurs, drawing in foreign and local buyers to invest.”

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