Seller of Seascape unit makes $3.8m loss

Tan Chee Yuen / EdgeProp | August 7, 2017

On July 24, a 4,069 sq ft unit at Seascape in Sentosa Cove was sold at a $3.8 million loss. The seller purchased the unit from the developer at $12.8 million ($3,145 psf) in May 2010. He sold it for $9 million ($2,212 psf), which translates into a loss of 30%, or 5% a year over a holding period of seven years.

A day later, another seller at Seascape sold a 2,174 sq ft unit at a $2.05 million loss. He bought the unit for $5.85 million ($2,690 psf) from the developer in April 2010 and sold it for $3.8 million ($1,748 psf). The loss works out to 35%, or 6% a year over a seven-year holding period.

Based on the matching of URA caveat data, there have been no profitable transactions and six unprofitable transactions at Seascape so far. The biggest loss involved a 4,069 sq ft unit that was sold at a $6.6 million loss on Feb 7. The previous owner, a Russian national, bought it from the developer at $12.8 million, or $3,146 psf, in June 2010. The unit was put up for mortgagee sale at an auction in January this year at an opening price of $6.8 million, but found no buyer. It was subsequently sold at $6.2 million, or $1,524 psf, by private treaty.

The Feb 7 transaction also marked the biggest loss so far for a condo at Sentosa Cove. The second- and third-biggest losses at Sentosa Cove were also traced to Seascape, an eight-storey seafront project comprising 151 units. The 99-year leasehold development was completed in 2011.

In 1H2017, there were 11 unprofitable condo transactions at Sentosa Cove. Losses averaged $1.12 million (16%). In 1H2016, there were seven unprofitable transactions, with losses averaging $1.48 million (26%). There were 10 profitable transactions in 1H2017, with an average profit of $471,205 (23%). In 1H2016, there were three profitable transactions with profits averaging $774,747 (33%).

Meanwhile, the third-biggest loss of $468,000 in the week of July 18 to 25 involved a 1,862 sq ft unit at Starlight Suites. It was bought at $3.84 million ($2,376 psf) in November 2011 and sold for $3.37 million ($1,809 psf) on July 21. This translates into a 12% loss, or 2% a year over a holding period of almost six years.

Starlight Suites is a freehold project on River Valley Close. Completed in 2014, the 35-storey tower comprises 105 units. So far, there have been four resale transactions at Starlight Suites, all four of which resulted in losses. The average loss was $271,174, or 11%.

On a brighter note, three private non-landed homes fetched profits in excess of $1 million. The seller of a 1,528 sq ft unit at Pacific Mansion realised a $1.23 million profit, the largest of the week. He purchased the unit for $688,000 ($450 psf) in April 1998 and sold it for $1.92 million ($1,256 psf) on July 24. This translates into a 179% gain, or 5% a year over 19 years. Pacific Mansion is a 288-unit freehold apartment on River Valley Close in prime District 9.

A 1,744 sq ft unit at Ridgewood, a 463-unit, 999-year leasehold development on Mount Sinai Rise in prime District 10, fetched the second-highest profit in the week. The property was bought in May 1999 at $858,000 ($492 psf) and changed hands for $1.9 million ($1,090 psf) on July 20. This resulted in a profit of $1.04 million, which translates into a 121% gain, or 4% a year over an 18-year holding period.

So far this year, there have been one unprofitable and two profitable transactions at Ridgewood. On Jan 26, the seller of a 1,399 sq ft unit incurred a $350,000 (18%) loss. On May 18, a 1,744 sq ft unit was sold for a $1.09 million (133%) profit.

At Mandarin Gardens, a 2,013 sq ft unit fetched a $1.02 million profit on July 21. The previous owner bought the unit for $630,000 ($313 psf) in June 2005 and sold it for $1.65 million ($820 psf). This works out to a 162% profit, or 8% a year over a holding period of 12 years.

Completed in 1986, Mandarin Gardens is a 99-year leasehold condo on Siglap Road in District 15. So far this year, there have been 18 profitable and five unprofitable transactions at the project. The average profit was $399,250, or 67%, and the average loss was $135,600, or 11%.

This article appeared in The Edge Property Pullout, Issue 791 (August 7, 2017) of The Edge Singapore.