Developers willing to offer discounts have been able to move luxury units in recent months. Will more do so, and could this be what is needed to revive the moribund segment?

A unit in Reignwood Hamilton Scotts was sold on June 16, signalling the first transaction in the condominium this year. The 2,756 sq ft, three-bedroom unit on the 10th floor fetched $8.5 million ($3,085 psf). It was a significant markdown from the $12.75 million ($4,626 psf) that a similar unit on the 27th floor commanded last October.

The 10th-floor unit was one of two “star buys” offered for sale two months ago. “We wanted to know what price the market is willing to accept,” explains Anuar Ngadimo, sales manager of Reignwood Hamilton Scotts. “So, we decided to test it by coming up with a package that will entice buyers. It’s a good bargain, especially for those who are bottomfishing.” The other star-buy is the show suite on the third floor, which is of the same size but priced at $10 million ($$3,628 psf) because it is fully furnished.

The novelty of the 30-storey Reignwood Hamilton Scotts is that every apartment has an en suite sky garage accessed by a special glass car elevator. And, it is only one of three such condos in the world that has actually been built: the other two are in the US, namely the Porsche Design Tower in Miami, Florida and 200 11th Avenue in West Chelsea, New York.

Reignwood Hamilton Scotts appears to have attracted more than just car aficionados. The recent buyer of the star-buy unit is said to be a Middle Eastern businessman based in Dubai, who intends to retire in Singa pore. He purchased it for its prospect — a direct view of Goodwood Hill, and the condo’s proximity to the Newton MRT station, which is a 20-minute ride to Changi International Airport.

“I was curious and asked him if he intends to buy a car in the future, given that he will have an en suite garage next to his living room. But he said he didn’t want the hassle of employing a chauffeur, and he likes the convenience of the MRT in Singapore,” says Ngadimo.

As at end-1Q2015, Reignwood Hamilton Scotts had 32 unsold units. The project, which was completed in 2012, has a total of 56 units. Of these, 52 are three-bedroom units of 2,756 sq ft each, another two are junior penthouses of 3,229 sq ft each, and the remaining two are penthouses of 6,975 sq ft each.

Injecting life
The majority of the buyers of Reignwood Hamilton Scotts are foreigners, who bought the units for use as holiday homes. “Most of them visit only during Christmas or Chinese New Year,” says Ngadimo. For the rest of the year, the units are left vacant.

To inject more life into the building, Reignwood decided to lease out some of the unsold units. To date, 15 of the three-bedroom units have been leased at rental rates ranging from $14,000 to $16,000 a month. The tenants are expatriates, a mix of singles and couples, as well as a handful of families with young school going children. “Most of the tenants do not own cars but like the project for the convenience of its location and the view of the greenery,” adds Ngadimo. “But living in an apartment with an en suite sky garage could inspire them to own a car.”

Developed by KOP Properties, Reignwood previewed in July 2008 as The Hamilton Scotts, but sales stalled during the global financial crisis. It was relaunched in 2009, and a total of 20 units were sold at prices ranging from $2,300 psf to $3,676 psf. The remaining 36 unsold units were scooped up by Reignwood Group in a bulk purchase in April 2013.

The group is controlled by Chinese-Thai billionaire Chanchai Ruayrungruang, ranked by Forbes as one of China’s richest men, with a net worth of US$2 billion ($2.7 billion). Besides luxury real estate, Reignwood’s sprawling businesses include luxury yacht chartering and private jet services, as well as the exclusive distributorship of Red Bull energy drink in China.

The project was rebranded Reignwood Hamilton Scotts in 2013 and saw three units sold that year, at prices ranging from $8.68 million ($3,150 psf) for a sixth-floor unit to $13.78 million ($5,001 psf) for a 24th-floor unit. Last year saw only one unit sold, namely the unit on the 24th floor, which fetched $12.75 million ($4,626 psf) in October.

‘Viewings have increased’
Reignwood hopes the star buys will revive sales in the three-year-old condo. “Viewings and requests for viewing have certainly increased over the last two months,” says Ngadimo. “While there are some Singaporeans, most of them are foreigners, from China, Indonesia, Malaysia and the Middle East.”

The project has also benefited from its proximity to the 231-unit high-rise The Scotts Tower. The freehold project is part of giant developer Far East Organization’s SoHo series. Units range from 638 to 3,500 sq ft, and the main feature is the loft-style apartments with floor-to-ceiling height of 3.4m. As at end-May, 139 units had been sold at a median price of $3,335 psf, according to URA data.

The Scotts Tower has seen renewed interest in recent months, especially for its one- and two-bedroom loft-style apartments. Shaw Lay See, Far East Organization’s chief operating officer of property sales, attributes that to several factors, including prices that start from $2.2 million for a 624 sq ft unit; its prime location, which is within walking distance of Orchard Road; and the project’s expected completion with its Temporary Occupation Permit (TOP) targeted to be obtained sometime in mid-2016.

Price cuts
Like Reignwood, other developers of completed luxury condos with unsold inventory are willing to explore star buys and other schemes, such as a TOP discount, absorption of the Additional Buyer’s Stamp Duty (ABSD) and furniture packages, to entice buyers and boost sales.

Marina Bay Suites is an example of a luxury condo where lowering prices have bolstered sales. The developer had 18 remaining units at the start of the year, and is said to have offered a 25% discount, on top of an additional discount, for selected units as star-buys. The result is that 16 units have been sold over the last six months, according to agents. Prices achieved ranged from $2,153 to $2,490 psf, according to caveats lodged. These are a shade lower compared with units sold in 2013 and 2014, when prices ranged from $2,699 to $3,313 psf.

Marina Bay Suites

The two remaining properties for sale at Marina Bay Suites are fourbedroom- plus-family-room units sized at 2,691 sq ft. One is located on the 47th floor and the developer’s list price is $9.62 million. After a 25% discount and a further 9% discount, the offer price is $6.5 million ($2,415 psf), according to an agent’s listing. The other unit is the show suite on the 49th level, which will be sold fully furnished. The list price is $9.76 million, but with a 25% discount and a further 4% discount, the offer price is $7 million ($2,601 psf).

Marina Bay Suites is a 66-storey residential tower and contains 221 units. Completed in 2013, it is part of the multibillion-dollar Marina Bay Financial Centre mixed-use scheme. Unlike most of the other 99-year leasehold condo schemes in Marina Bay, where the majority of the units have one or two bedrooms, those at Marina Bay Suites are exclusively three- and four-bedroom units, with sizes ranging from 1,691 to 2,691 sq ft. It is also linked to the Downtown MRT station.

The biggest penthouse at Marina Bay Suites is the 8,514 sq ft duplex, with five bedrooms and a private swimming pool. It was sold for $19.5 million ($2,293 psf), according to a caveat lodged at end-May. The price psf reflects the current market sentiment, compared with three years ago, when a 5,662 sq ft penthouse located directly below it fetched $19.3 million ($3,409 psf), setting an all-time high price psf for the project.

On Tomlinson Road, off Orchard Boulevard, is the newly completed 36-storey Tomlinson Heights by developer Hotel Properties Ltd, controlled by tycoon Ong Beng Seng. The 70-unit freehold project was completed in 3Q2014 and, since then, the dev eloper has been offering buyers a TOP discount of 15%.

Transactions in May and June saw spacious three-bedroom units of 2,745 sq ft at the luxury condo sold at prices ranging from $7.66 million ($2,789 psf) for a fifth-floor unit to $8 million ($2,915 psf) for one on the 23rd floor. These prices are slightly lower than the $2,941 to $3,277 psf achieved for the 2,734 sq ft units sold between 2010 and 2014. To date, more than half the units have been sold.

Luring Hong Kong value hunters
Over the weekend of July 4 and 5, Savills will be marketing Tomlinson Heights in Hong Kong. On top of the 15% TOP discount, there will be an additional 7% discount for buyers in Hong Kong just for that weekend. The units for sale are the high-floor three-bedroom ones from the 25th to 33rd floors, with prices starting from $8 million or from $3,100 to $3,400 psf. This comes on the back of a series of roadshows featuring other luxury projects from Singapore that were showcased there and saw relatively strong sales. “Buyers in Hong Kong see value in our luxury projects as they feel their prices have already peaked,” explains Alan Cheong, head of research at Savills Singapore. He cites the example of a 4,664 sq ft unit at Conduit Road in Hong Kong that hit a jaw-dropping HK$92,857 ($15,900) psf in April. It was a leasehold property by Henderson Land.

On June 8, the South China Morning Post reported that a duplex at Swire Group’s luxury project Opus was sold for a staggering HK$497 million. The price of the 5,188 sq ft unit at Opus translates into HK$95,971 psf ($16,735 psf), making it Asia’s most expensive luxury apartment. The psf price is 2.4 times more than the $6,840 paid for a unit at SC Global’s The Marq on Paterson Hill in 2011, Singapore’s most expensive condo to date.

Wheelock Properties is also said to have showcased its luxury project, the freehold 84-unit Ardmore Three, in Hong Kong a fortnight ago. A departure from the other two projects in its Ardmore series — Ardmore Park and Ardmore II, where all typical units were identical four-bedroom apartments with sizes above 2,000 sq ft — the typical units at Ardmore Three are all three-bedroom apartments of 1,776 sq ft.

Ardmore Three obtained its TOP in 4Q2014, and as at-end May, only three units had been sold at prices ranging from $5.7 million ($3,160 psf) to $6.2 million ($3,485 psf). However, several units were said to be sold in Hong Kong over the weekend, although the sales are not reflected in URA data as yet.

Marina One Residences, which was showcased in Hong Kong in a roadshow in May, recorded 12 sales that month at a median price of $2,391 psf, according to URA data. Of the 521 units released in one of the towers, 353 units had been sold as at end- May. The 99-year leasehold project by M+S, a joint venture between Singapore and Malaysia’s sovereign wealth funds, will be heading to Hong Kong for a second roadshow in the coming weeks, according to marketing agents.

Another project that will debut in Hong Kong is the 366-unit Corals at Keppel Bay by Keppel Land. It is designed by architect Daniel Libeskind, who also designed the developer’s Reflections at Keppel Bay project.

Bold moves needed
When it comes to cutting prices, one of the boldest developers is MCL Land, which set the ball rolling last year by offering discounts of up to $300,000 for units at its Hallmark Residences. Two bedroom units that were priced from $2 million saw prices slashed to $1.8 million, while three-bedroom units priced above $3 million sank to $2.7 million. Four-bedroom units that were priced above $3.7 million before were reduced to $3.4 million. The freehold 72-unit condo on Ewe Boon Road off Bukit Timah was completed earlier this year, and only three units remained unsold as at end-May.

Another development by MCL Land, Palms @ Sixth Avenue, a strata landed housing project with 32 semi-detached houses, obtained its TOP in March. The project in prime district 10 has sold nine units since its completion. The developer has offered buyers an option of either a 10% ABSD absorption, or a furniture package worth up to $200,000 to $300,000. “We want to give owners flexibility,” says a company spokeswoman.

The latest recorded transaction at Palms was for a 4,855 sq ft unit that fetched $5.16 million ($1,063 psf), after deducting the $200,000 furniture package from the original list price of $5.36 million. Most of the other units sold in May also saw similar discounts. Most buyers opted for the furniture package as they intend to move into the houses themselves, says MCL Land.

“Developers with unsold inventory will now have to compete with individual owners in the resale market,” says Samuel Eyo, managing director of Singapore Christie’s Homes. “So, the only way to invigorate the luxury residential market is to offer star-buys and some attractive inducements as buyers are price-sensitive.”

This article appeared in the City & Country of Issue 684 (July 6) of The Edge Singapore.