Two luxury condominiums were put up for liquidator’s sale at Knight Frank’s auction on Nov 19. One of them was a three-bedroom unit at Helios Residences. The 140-unit condo consists of a 20-storey tower and a 19-storey tower, which are elevated above street level. The project was developed by Wing Tai Holdings and completed in 2011.

The 140- unit Helios Residences was developed by Wing Tai Holdings and completed in 2011

The 1,701 sq ft unit that was put up for sale is located on the 12th floor of the 20-storey tower. Even though there are five units per floor, each unit comes with private lift access.

No prior caveats were lodged for the unit. However, the most recent transaction of a similar- sized unit was on the 18th floor of the same block, which changed hands for $4.88 million ($2,869 psf) in October last year.

The opening price for the unit on the 12th floor was $4 million ($2,352 psf), but no bids were received, and the property was withdrawn, according to Sharon Lee, head of auctions at Knight Frank. It is currently tenanted out at a monthly rental rate of $8,000, with the lease expiring next April. Therefore, it will be sold with the existing tenant in place. Based on the opening price, the gross yield translates to 2.4%.

When Helios Residences was first launched in 2007, units were sold at prices upward of $2,800 psf, with most of the units sold above $3,000 psf. At the peak of the market, a 1,668 sq ft unit on the 17th floor of the 19-storey tower fetched $6.63 million or an all-time high of $3,976 psf in January 2013. There are only three units per floor in this tower. The most recent transaction at the condo was for a 1,668 sq ft unit on the 14th floor, which is situated three floors below the unit that achieved the all-time high two years ago. It was sold for $4.2 million ($2,517 psf) in October last year.

Therefore, the unit that is offered for liquidator’s sale has proven to be attractive to potential buyers. “Transaction prices are now hovering at $2,500 psf compared with close to $4,000 psf at the peak two years ago,” says Lee. The unit also has an efficient liveable area, unlike most new projects where the balcony is sometimes as large as the living room, she adds. The built-up space and finishing are of top quality, and more importantly, it is by a reputable developer. “That has become increasingly important to most discerning buyers today,” she says.

The other unit that is featured as a liquidator’s sale at Knight Frank’s auction is located at Draycott 8, another luxury condo by Wing Tai in the prestigious Draycott Drive neighbourhood. The project comprises three 24-storey towers. The first tower consists of four-bedroom units sized at 2,863 sq ft, while the second tower has four-bedroom units of 2,896 sq ft and 2,906 sq ft. The third tower comprises only two-bedroom loft-like apartments of 1,173 to 1,615 sq ft.

The unit that was put up for liquidator’s sale is a 2,863 sq ft unit on the eighth floor of one of the towers, which has an unblocked view of Orchard Road and Claymore Hill. The owner purchased the unit in 2006 for $4.58 million ($1,601 psf).

The opening price at the auction was $5.4 million ($1,886 psf). A counter bid of $4.6 million was received. Three parties bid for the unit, and the final bid price was $4.85 million. As this was still below the reserve price, the property was withdrawn. After the auction, one of the bidders submitted a bid above $4.85 million, says Lee. Negotiations with the liquidator is now underway.

The most recent transaction at Draycott 8 was for another 2,863 sq ft unit on the 10th floor that was sold for $5.75 million ($2,008 psf) in December last year. As the condo is already 10 years old, the new buyer would have to spend some money renovating the unit, says Lee. There is a balance of 81 years left on the original 99-year lease.

In August, 23 units (22 four-bedroom units and a penthouse) comprising half the units in the adjacent block at Draycott 8 were sold in a bulk deal for just above $150 million ($2,200 psf). The buyer was the Chiu family of Tang Group of Companies, which recently won the 99-year leasehold site at Alexandra View with a top bid of $376.88 million.

The seller was said to be a German fund managed by Morgan Stanley and was believed to have made a loss, as it purchased the units for $2,600 psf in 2007. Another 23 units in the same tower were purchased by a fund managed by Alpha Investment Partners in 2010 for $157 million or $2,300 psf. They consist of four-bedroom units and a penthouse. The seller then was another fund managed by Morgan Stanley.

Apart from the bulk sale to the Chiu family, there was another transaction in August. It was the sale of a 1,647 sq ft two-bedroom unit on the 12th floor of the third tower. The unit fetched $2.93 million ($1,779 psf) in the resale market, according to a caveat lodged on Aug 11. The unit was purchased for $3.4 million ($2,064 psf) in 2007. Hence, the seller saw a loss of some 13.8%.

Will people find value in buying a unit under liquidator’s sale? Auctioneers such as Lee believe so. A liquidator’s sale is triggered when a company is being wound up and its assets including properties are seized and sold to pay off the creditors, she says.

Start browsing for condos at Helios Residences and Draycott 8.

This article appeared in the City & Country  of Issue 704 (Nov 23, 2015) of The Edge Singapore.