Can go for steamboat and peking duck next door. :D
http://www.straitstimes.com/archive/thursday/premium/money/story/developer-offers-bulk-sale-amid-market-blues-20140123
Developer offers bulk sale amid market blues
But lot price of Newton condo's 21 units 'beyond reach of most firms'
Published on Jan 23, 2014
http://i.imgur.com/DtY5Yzr.jpg
Great Newton Properties, the developer of the 36-unit Newton Imperial condominium in Newton Road, is now trying to offload the remaining apartments in an investment deal. The freehold project in District 11 sits on the site of the former Surrey Towers. -- ST PHOTO: DESMOND FOO
By Cheryl Ong
THE developer of the Newton Imperial condominium has put 21 unsold units up for sale at a reduced price, in the hope that a single buyer will take the lot off its hands.
The ambitious move comes amid a slowing property market beset by cautious buyers and tougher lending rules.
The 36-unit condo in Newton Road has been caught in the downturn, with only 15 units sold since it was completed in 2011.
Prices averaged $1,880 per sq ft (psf) in the second half of 2012, although a 1,711 sq ft unit was sold for $3 million, or $1,753 psf, in October last year. More than 90 per cent of the owners are foreigners.
Newton Imperial comprises only three-bedroom units.
The lack of buyer interest has forced Great Newton Properties, an Indian firm based in Hong Kong, to try offloading all 21 apartments at an undisclosed price.
Analysts said that the move is a further sign of a weakening market, as developers look for alternative ways to shift units.
"The persistent price falls, mainly for large, luxury apartments, have painted a pessimistic picture for the high-end residential market," said Mr Ong Kah Seng, director of consultancy R'ST Research.
The freehold project in District 11 sits on the site of the former Surrey Towers, acquired by Great Newton Properties for $44.1 million in 2007.
Mr Ong said that buying units in bulk in the current market is a riskier investment, as leasing interest in high-end residential properties has been weakening. However, large units tend to be well designed and could have better value in the long term, he added.
Mr Arun Sugumaran, senior manager of Savills Regional Capital Markets, said the developer, which is controlled by Indian national Jhaveri Darsan Jitendra, decided to sell the units in bulk as property cooling measures have "slowed things down".
He added that the units are "priced attractively", considering the Additional Buyers' Stamp Duty (ABSD) the buyer will have to bear.
Buyers could reap a rental yield of 3 per cent to 3.25 per cent based on an estimated monthly rent of $8,000, estimated Mr Sugumaran, once ABSD costs are factored in.
Savills said nearby projects, such as Wing Tai's L'Viv and Novelty Group's 26 Newton, have sold units for $2,100 psf to $2,600 psf, but SLP International research director Nicholas Mak noted that these are mostly smaller units.
Mr Mak said the estimated rental yield suggests that the asking price for the 21 units will be from $65 million to $72 million, making a property fund the likely buyer, as few firms have pockets deep enough.
"Property funds normally acquire units for capital appreciation. But they will have to hold them for at least four years to avoid the sellers' stamp duty and, if interest rates increase, that will affect holdings costs," he added.
Experts said they do not expect more of such sales as these typically take place when the market is in a worse state than it is now.
Said Mr Mak: "Some smaller developers might just want to exit the market, but the reason we are not seeing more of such sales is that there is still a mismatch between what the buyers are willing to pay and the asking prices."
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