More deferred payment schemes offered at high-end condos

/ The Edge Property
December 9, 2016 10:11 AM SGT
The deferred payment scheme (DPS) offered at OUE Twin Peaks in April and a variation of it such as the “Stay-thenPay” programme rolled out by CapitaLand at d’Leedon and The Interlace in June have succeeded in moving unsold units in these completed developments.
More developers are now open to a similar strategy. The latest to adopt such a scheme is KOP Properties’ ultra-luxurious, freehold Ritz-Carlton Residences on Cairnhill Road. KOP Properties soft launched its DPS for Ritz-Carlton Residences in a roadshow in Hong Kong at end-October, marketed by SQFT Global Properties. Prices were said to start from just under $3,000 psf.
Under the scheme, buyers need to pay a 20% option fee, and exercise the option 22 months later, with completion in the 24th month. However, they can move into the unit after paying the option fee. The balance 80% will be deferred until two years later. With the DPS, the developer saw five units booked at the Hong Kong roadshow.
Ritz-Carlton Residences rolls out DPS
KOP Properties is now offering a similar DPS to buyers in Singapore. Ritz-Carlton Residences was completed in 2011. The project contains 56 apartments, which are a mix of threeand four-bedroom units sized at 2,831 sq ft and 3,057 sq ft respectively. There are also two penthouses: One is a junior penthouse of 3,466 sq ft on the 34th floor, while the other is a superior duplex penthouse of 6,501 sq ft spanning the 35th and 36th floors as well as the roof terrace.
The junior penthouse was sold for $11.8 million ($3,404 psf) in July 2009, while the superior penthouse fetched $28 million ($4,307 psf) in February 2011, according to caveats lodged then.
Stefanie Wong, a realtor with SRI, has been appointed the sales representative for Ritz-Carlton Residences in Singapore. After taking into consideration discounts and the DPS, prices of the three-bedroom units will start from $8.38 million ($2,960 psf).
Most of the available units at Ritz-Carlton Residences are three-bedroom units. The average monthly rental rate of such units at the project is $15,000.
All except one of the four-bedroom units have been sold. The remaining four-bedder is a 3,050 sq ft unit priced at $11 million or $3,607 psf.
The most recent transaction recorded at Ritz-Carlton Residences was the resale of a four-bedroom unit on the 28th floor of the 36-storey tower. The 3,057 sq ft unit changed hands for $8 million ($2,617 psf), according to a caveat lodged on Nov 25.
KOP Properties sold three units this year between February and June. Prices of the units sold ranged from $8.5 million ($3,003 psf) for a three-bedder on the 22nd level to $11.6 million ($3,795 psf) for a four-bedroom unit on the 33rd level.
Ritz-Carlton Residences saw five units booked under its deferred payment scheme which was soft launched in Hong Kong at end-October
‘Stay & Pay Later’ at Marina Collection
Another project that offered a form of DPS is Lippo Group’s “Stay & Pay Later” scheme for Marina Collection at Sentosa Cove. The 124-unit high-end condominium at Cove Drive in Sentosa Cove was completed in 2011. Buyers of units at Marina Collection will be able to enjoy the services and facilities at One°15 Marina Club next door.
All the units at Marina Collection are orientated such that they have a direct view of the swimming pools or the marina. The 99-year leasehold development has a mix of three- and four-bedroom units as well as four-bedroom-plus-studios. Three-bedroom units are sized from 1,873 sq ft to 2,099 sq ft; four-bedrooms are from 2,185 to 2,766 sq ft; and four-bedroom-plus-studios are from 2,788 to 3,272 sq ft. The penthouses are sized from 3,369 to 4,693 sq ft.
Under the “Stay & Pay Later” scheme, buyers only need to pay a 10% booking fee and another 10% down payment upon exercising the option to purchase a fortnight later. The balance will only be payable three years later. Upon paying the 20%, buyers can choose to move in or rent their units out.
Two units were sold at the four-storey Marina Collection in November. One was a 3,412 sq ft four-bedroom penthouse that fetched $6 million ($1,758 psf), while another was a fourbedroom-plus-studio on the second level that was sold for $5 million ($1,793 psf). Both units were said to have been sold under the “Stay & Pay Later” scheme. The penthouse is believed to have been brokered by Mutual Benefits Realty, while the other unit is said to be brokered by Bruce Lye, managing partner of SRI.
The remaining 29 units offered for sale under the “Stay & Pay Later” programme at Marina Collection are marketed jointly by Mutual Benefits Realty, PropNex Realty and SRI.
Two units at the Marina Collection in Sentosa Cove were sold in November under the ‘Stay & Pay Later’ scheme
iLiv@Grange — bulk purchase interest
Another project that recently dangled DPS to buyers was iLiv@Grange. The 30-unit freehold condo was completed in October 2013. Under the Residential Property Act’s Qualifying Certificate rules, all developers with non-Singaporean directors or shareholders need to complete their projects within five years and sell all the units in the development within two years after the Temporary Occupation Permit (TOP). Failing to do so will incur extension charges of 8%, 16% and 24% for the first, second and third years respectively. The amount is pro-rated according to the proportion of unsold units.
This means that Heeton Holdings, as a Singapore Exchange-listed developer, would have had to sell all the units by October 2015 to avoid paying extension charges. Heeton therefore offered the project for en bloc sale twice. The first time was in August 2013, just two months prior to TOP. The asking price then was $129 million to $135 million, or $2,200 to $2,300 psf based on the strata area of 58,500 sq ft. The second time was in 2015, at a lower price range of $110 to $120 million, or $1,879 to $2,050 psf based on strata area. Both times it failed to secure a buyer.
In early October, however, Heeton announced it had sold its entire stake in Heeton Residence, the sole shareholder of Heeton Realty, which in turn owns iLiv@Grange. The sale valued the property at $95 million, which translates into $1,624 psf. The buyer is said to be a group of Singaporeans.
The units at iLiv@Grange are a mix of oneto three-bedroom designer apartments and two penthouses. Under the DPS, buyers need only pay 20% down payment and the remaining 80% two years later. The project was marketed in Hong Kong by SQFT Global Properties.
The units were offered for sale at an average price of $2,500 psf. While there was interest from retail investors in the individual units, there were also several parties in Hong Kong vying to buy the entire tower on an en bloc basis, according to a source.
SRI’s Lye foresees more completed highend condos with unsold inventory offering DPS in 2017.
This article appeared in The Edge Property Pullout, Issue 758 (Dec 12, 2016) of The Edge Singapore.