Is there a silver lining for high-end condos?
By Cecilia Chow, Tay Hock Meng / The Edge Property | January 29, 2016 10:00 AM MYT
Tags: high-end condo

A wave of transactions in the high-end condominium segment last month provided a glimmer of hope that 2016 could be the year that the Core Central Region (CCR) could see a turnaround in transaction volume. The CCR includes Marina Bay, Sentosa Cove and prime districts 9, 10 and 11.

At Richmond Park, a 1,259 sq ft, two-bedroom unit was sold for $2.88 million ($2,287 psf), according to a caveat lodged on Dec 17. The former owner purchased the unit for $2.44 million ($1,939 psf) in a sub-sale in May 1997. The capital appreciation was close to 18% over 19 years. If the owner had been an investor and the unit was leased for $5,000 to $6,000 a month over the past two decades, the gains will be even higher, reckons Joseph Tan, executive director of residential services at CBRE.

The previous transaction at Richmond Park was in August 2014, when a 1,550 sq ft unit on the 11th floor was sold for $4.02 million ($2,590 psf). The 159-unit freehold condo is located behind the Paragon shopping mall on Bideford Road. At its peak, a 3,380 sq ft penthouse was sold for $10 million, or an all time high of $2,959 psf, according to a caveat lodged in 2012.

Richmond Park was developed by the former DBS Land (now part of CapitaLand) and completed in 1996. Tan was the marketing agent for the project in 1994 when it was first launched. “It was the first condo where psf prices hit four digits,” he recalls. “All the units were sold out in 1½ days and achieved an average price of $1,000 psf.”

The market may be very different from what it was two decades ago. However, the Cairnhill area remains a favourite among wealthy Indonesians, many of whom purchased units at Richmond Park 20 years ago. The main attraction was its location and proximity to the Orchard Road shopping strip and Mount Elizabeth Hospital and Medical Centre. “They buy the units and use them as a holiday home or resting home when they are here for medical treatment,” adds Tan. “It’s the ‘Mount E syndrome’.”

At $2,287 psf, Richmond Park looks attractive, says Samuel Eyo, managing director of Singapore Christie’s International Real Estate. “There has been an increase in the number of people shopping for deals in the high-end segment,” he adds. “Some people are still looking out for fire sales and hoping to pick up something at a discount of 40% to 50%. Others are happy when they get a 15% to 20% discount on the asking price.”

Ardmore Park revival?
Interest in Ardmore Park seems to have revived towards the end of last year. A 1,776 sq ft, three-bedroom apartment at Ardmore 3 was sold for $5.44 million ($3,064 psf), according to a caveat lodged on Dec 22. “It’s a good price for a unit on the 10th floor of the tower,” says Eyo. The previous transaction was in June, when a unit on the 19th floor was sold for $5.83 million ($3,281 psf).

Wheelock Properties is said to be previewing Ardmore 3 this year. To date, five of a total of 84 units in the freehold condo have been sold. Last year, the project was showcased in Hong Kong by CBRE and Singapore Christie’s International. On the weekend of Jan 16 and 17, Singapore Christie’s International will be marketing Ardmore 3 in Kuala Lumpur.

The exchange rate between the Singapore dollar and the Malaysian ringgit is hovering at $1 to RM3.05. The price of the unit on the 10th floor of Ardmore 3 that was sold for $5.44 million in December would therefore translate to RM16.6 million. That excludes the 15% additional buyer’s stamp duty that foreign buyers are subject to. “Malaysians continue to view Singapore as a safe haven,” says Eyo. “Buying a prime freehold property such as Ardmore 3 will provide a good hedge against a falling currency.”

Ardmore 3 will be previewed this year with a roadshow in Kuala Lumpur on Jan 16 and 17