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Thread: Banker Wee Cho Yaw buys all 45 unsold units at The Nassim for $411.6m

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    Default Banker Wee Cho Yaw buys all 45 unsold units at The Nassim for $411.6m

    http://www.straitstimes.com/business...-at-the-nassim

    Banker Wee Cho Yaw buys all 45 unsold units at The Nassim for $411.6m

    Jan 17, 2017

    Developer CapitaLand avoids millions of dollars in penalties with Kheng Leong's buy

    Lee Xin En


    One of Singapore's richest men, veteran banker Wee Cho Yaw, has bought all 45 unsold units at upmarket condominium, The Nassim, for $411.6 million.

    The bulk sale gets developer CapitaLand off the hook over penalties that apply to unsold properties after a stipulated period. The penalties could have run to millions of dollars.

    Mr Wee, chairman emeritus of United Overseas Bank, bought the properties through his family's private real estate arm, Kheng Leong.

    The deal values the property at $407.2 million, or $2,300 per sq ft.

    CapitaLand said the agreed property value represents a bulk sale discount of about 18 per cent on the current individual unit sale price.

    This is in line with a range of discounts seen at recent bulk sale transactions, such as the 156 units sold at Nouvel 18 at a discount of about 16 per cent, as well as the 30 units sold at iLiv@Grange with 23 per cent off.

    The 45 units at The Nassim make up a strata area of 16,446 sq m, and was sold by CapitaLand subsidiary CRL Realty, which owns the property developer Nassim Hill Realty.

    Other individual buyers have snapped up 10 units in the property at 18, Nassim Hill, which features 55 units in eight five-storey blocks.

    It was previously reported that some of these buyers include Mr Sigid Wonowidjojo and his relative. Mr Wonowidjojo's family controls Indonesian cigarette maker Gudang Garam.

    Of the 45 units purchased by Mr Wee, three are five-bedroom units, and 16 are four-bedroom units. The remaining 26 are three bedders.

    The deal is the latest in a series of recent bulk sales of residential units which developers have done to avoid the Qualifying Certificate (QC) penalties.

    Under the Residential Property Act, developers issued with a QC upon buying private residential land must finish building the project within five years of acquiring the site and sell all units within two years of obtaining a temporary occupation permit (TOP).

    Failing that, the developer pays extension charges pro-rated to the proportion of unsold units.

    The Nassim, which received its TOP in August 2015, would have had to pay extension charges by August this year on unsold units.

    CapitaLand estimated that if the 45 units had been unsold by August, it would have had to pay $9.3 million in the first year. These fees would have jumped to $27.9 million by the third year.

    Developers paid far more in extension charges last year compared with the same period for 2015. As at Oct 27, the Government collected about $58.2 million in fees, up from just $24.9 million collected in the whole of 2015, said the Singapore Land Authority last year.







    About The Nassim

    Project Name The Nassim
    Developer CapitaLand Residential Singapore Pte Ltd
    Address Nassim Hill
    District D10
    Tenure Freehold
    Units 55 Residential Units
    Number of storey 6 storey tall
    Land Size Approx. 125,566 sq feet
    Description Luxury 55 units condominium development
    Architect Mok Wei Wei - W Architects

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    http://www.businesstimes.com.sg/comp...ads-the-nassim

    CapitaLand offloads The Nassim

    S$411.6m sale of the development company and 45 unsold units to private firm Kheng Leong was to avoid paying extension charges, it says

    Tuesday, January 17, 2017

    by Lee Meixian
    [email protected]
    @LeeMeixianBT


    CAPITALAND on Monday said it has sold its 100 per cent stake in Nassim Hill Realty (NHR) to an unrelated private company, Kheng Leong, for S$411.6 million.

    Included in the sale are also 45 unsold units in The Nassim, a luxury freehold boutique condominium project in Nassim Hill which has sold only 10 units since 2015.

    CapitaLand said it is doing this to avoid paying extension charges which would kick in from August 2017.

    NHR, which developed The Nassim, is subject to the qualifying certificate (QC) condition to sell all the units in The Nassim within two years from August 2015, which was when it obtained its temporary occupation permit.

    Should the developer still have 45 unsold units by August 2017, it would have to pay extension charges of S$9.3 million to extend the deadline by another year.

    Should CapitaLand still require further extension after the first year, it would have to pay extension charges of S$18.6 million and S$27.9 million for the same number of unsold units in the second and third year respectively.

    The developer said yesterday: "With this transaction, CapitaLand will avoid the extension charges payable if these 45 units remain unsold by the sell-by-date.

    "In addition, CapitaLand will not need to incur additional marketing and sales expenses, maintenance fund contribution, property taxes and other maintenance and up-keeping cost for the unsold units."

    The QC rule is aimed at preventing foreign developers from hoarding or speculating in residential land in Singapore. Effectively, all listed companies are considered foreign developers.

    The consideration is subject to a post-completion adjustment. The price tag comprises the estimated net tangible assets value of S$138.7 million as of yesterday.

    It also takes into account the agreed property value of the 45 units in The Nassim of S$407.2 million, and an assignment of a shareholder's loan of S$272.9 million. The consideration was paid entirely in cash.

    CapitaLand admitted that the agreed property value at S$2,300 per square foot on the strata area represented a bulk sale discount of about 18 per cent from the current individual unit sale price of these 45 units.

    But it said that the discount is in line with the range of discounts of 16 per cent to 23 per cent for bulk sales of residential units done in recent transactions.

    A number of other developers have been making similar bulk sales of their unsold units to escape the punitive extension charges.

    For example, Tiong Aik's Meadows Property sold 23 units of Starlight Suites in River Valley Close to Evia Capital in May 2016 for S$48 million. This was done via a share sale of the development company.

    Last July, a joint venture between Wing Tai and City Developments (CDL) also sold 156 units of Nouvel 18 in Anderson Road to CDL for about S$411 million. In October, CDL then offloaded Nouvel 18 to a group of high net worth Singaporean investors via a S$977.6 million profit participation securities platform.

    Heeton Holdings in September sold all 30 unsold units of iLiv@Grange to a group of Singaporean investors for S$95 million.

    The Business Times also reported last November that CS Land, formerly known as China Sonangol, was in talks with several parties for the sale of 38 unsold units in its flagship project TwentyOne Angullia Park in Orchard Road, likely also to avoid extension charges.

    Before the news was out, CapitaLand shares ended two cents lower at S$3.15.

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