90 Sentosa condos sold at average $1,500 psf

Singapore
Published October 10, 2006

90 Sentosa condos sold at average $1,500 psf

By KALPANA RASHIWALA

HO Bee Group has sold about 90 units at The Coast condo at Sentosa Cove since Friday at an average price of $1,500 per square foot - and plans to raise prices gradually.

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The Coast: Ho Bee officials expect prices of condos at Sentosa Cove to hit $2,000 psf in the next 12 to 18 months

The average price achieved so far for the 249-unit, 99-year leasehold condo is almost double the $785 psf at which Ho Bee launched its first condo at Sentosa Cove about two years ago. And Ho Bee officials expect prices of condos at Sentosa Cove to hit $2,000 psf in the next 12 to 18 months.

'As the precinct gets developed over time, people will appreciate the concept of waterfront living in a gated community,' Ho Bee chairman and chief executive Chua Thian Poh said in an interview yesterday.

Ho Bee executive director Ong Chong Hua added: 'The integrated resort/casino will provide the X factor for Sentosa Cove. We're very bullish.'

Noting that prices of 99-year leasehold bungalow lots at Sentosa Cove have surpassed those of freehold land in prime districts on mainland Singapore, Mr Ong predicts that the same trend will manifest itself over time for condo values in the upscale waterfront housing district.

'There's scarcity value at Sentosa Cove', which will have about 2,500 homes when development is completed in about four years. Ho Bee is understood to be holding back further sales at the condo until later this week.

Of the 90 units sold at The Coast so far, 45 per cent were bought by foreigners and permanent residents, including Indonesians, Hongkongers, Europeans and Americans.

The project is being marketed by CB Richard Ellis and DTZ Debenham Tie Leung.

All units at the development - one block of which is six storeys high and the rest eight storeys - boast seafront and waterway views. Prices range from around $3 million for a three-bedder to $6.4 million for a penthouse.

Analysts estimate Ho Bee's breakeven cost could be around $930-$950 psf, which translates to a pre-tax profit of around $300 million for its 90 per cent share in the joint venture company that is developing The Coast. The other 10 per cent is held by Engro Corporation.

For the six months ended June this year, mainboard-listed Ho Bee Investment reported a group net profit of $37.5 million - close to the $38 million achieved for the whole of last year.

Ho Bee officials did not comment on profits from developing The Coast yesterday, but said proceeds from sales will help lower the group's gearing ratio to 0.5 to 0.6 by year-end from 0.9 as at June 30.

The reduction in gearing will be supported by cashflow from The Berth by The Cove condo - Ho Bee's maiden project on Sentosa Cove - when it receives its Temporary Occupation Permit this month, signalling the collection of a substantial portion of sales proceeds from buyers, said Ho Bee executive director Desmond Woon.

Besides the two condos at Sentosa Cove, Ho Bee is developing an eight-unit terrace house project called The Berthside (fully sold) and a total of 50 bungalows on two man-made islands.

The group has sold 20 of 21 bungalows on Coral Island and expects to launch Paradise Island, with 29 bungalows, towards the year-end or early next year.

On the mainland, Ho Bee expects to release a 60-unit freehold condo in Orange Grove Road around December.

The group is on the lookout for more sites in Singapore and is eyeing new overseas markets - India, possibly second-tier cities such as Hyderabad and Pune, and Vietnam. Ho Bee has effective stakes of nearly 10 per cent in two Shanghai projects.