38 units at The Draycott up for sale

[reporter2]

http://www.businesstimes.com.sg/arch...-sale-20140325

Published March 25, 2014

38 units at The Draycott up for sale

By mindy tan [email protected]


THE investment holding company of the family (Tan Chwee Boon Pte Ltd) that developed The Draycott has put up 38 units for sale by expression of interest.

The portfolio has been independently valued at $1,900 per square foot, which translates to an absolute price of $198 million.

The total strata area for the 38 units is about 104,429 square feet, and represents around 31 per cent by share value and strata area of the whole development. Of the 38 units, 30 are located in the tower block and face Goodwood Hill.

The development comprises a total of 133 units. Completed in the 1980s, the 34-storey development was one of the tallest condominium buildings then. It is located along Draycott Park and next to Ardmore Park.

From an en bloc perspective, an investor who pays, for example, $200 million for the 38 units would indirectly be buying into the redevelopment potential for the land at the rate of around $1,790 per square foot per plot ratio (psf ppr), said JLL.

By comparison, Hampton Court, also located along Draycott Park, was sold to Swire Group at about $2,526 psf ppr in December 2012. Westwood Apartments was also sold at a similar rate in 2007 in an en bloc sale. These two examples point to an attractive 40 per cent arbitrage potential if an en bloc sale is timed propitiously, said JLL.

The portfolio's valuation of $1,900 psf also offers a discount when compared with individual sales of other projects in the vicinity. Three units at the nearby Ardmore Park were sold at an average of $3,490 psf in the second half of last year while a low floor unit at Four Seasons Park was recently transacted at $2,323 psf.

"The market is experiencing a low point now, with the cumulative weight of the suppressive measures at its peak, especially with foreigners needing to pay 18 per cent stamp duty. As a result, prices of high-end homes around Orchard Road have eased as much as 15 to 25 per cent from the high in 2007," said Karamjit Singh, head of investments and residential at JLL.

"Astute long-term investors who believe in market cycles would find this a timely investment. When the market for high-end homes recovers, possibly in the medium term, an en bloc sale along with the other owners of The Draycott would be an ideal exit strategy."

[catsick]

They will have no chance of selling, Any buyer will aver to also pay huge absd and still only own 30% of the development so not be in any position to force an en block, much better to by the whole of a smaller building that you can control , also the article compares the pricing with recent sales at ardmore park, this is a very old building with horrible round rooms, the last sale in this building was at 1660 psf and you would be lucky to get this now, also these units are offered to rent at 2.80 psf so the rental yield at 2k psf would be net around 1% after costs , so it would take over 10 years to just earn back the styamp duties any buyer of 30+ units would be paying , hardly a great investment !

[reporter2]

http://www.straitstimes.com/archive/...-sale-20140325

Firm puts 38 units at Draycott luxury condo up for sale

Apartments, valued at $1,900 psf, translates to absolute price of $198m

Published on Mar 25, 2014

By Melissa Tan


AN INVESTMENT holding company owned by the family that developed The Draycott is putting 38 units in the luxury development up for sale.

The 34-storey condominium, near Orchard Road, with its distinctive cylindrical shape, was one of Singapore's tallest condos when completed in the 1980s.

It has 133 units in total. An independent valuer has valued the 38 units in the portfolio at $1,900 per sq ft over the strata area of 104,429 sq ft, which translates to an absolute price of $198 million.

The condo, at 50, Draycott Park, is next to the prestigious Ardmore Park residential enclave and near The Tanglin Club and The American Club.

It was built by the Tan family headed by Mr Tan Chwee Boon, sources told The Straits Times.

Out of the 38 units put up for sale, 30 are located within one column in the tower block facing Goodwood Hill, which is state-owned.

Mr Karamjit Singh, head of investments and residential at JLL, which is marketing the units, said that most of the other high-end condominiums around Orchard Road that were built in that era were sold en bloc between 2006 and 2007, and have been redeveloped.

These include Pin Tjoe Court, Westwood Apartments and Ardmore Point, he said.

"The Draycott is one of the few condominiums remaining in the area, which should make it lucrative to sell collectively, especially when the demand for land in the luxury end of the market recovers."

He added that the valuation of $1,900 psf made it cheaper than individual sales in the vicinity.

For instance, three units at the nearby Ardmore Park were sold at an average of $3,490 psf in the second half of last year.

A low-floor unit at Four Seasons Park was recently transacted at $2,323 psf.

Mr Singh said that although the market was "experiencing a low point now", a potential buyer of the 38 units could sell them en bloc when the market recovers.

The expression of interest exercise for the sale will close on April 29 at 3pm.

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