Indian singer, businessman Shael Oswal sells Sentosa villa for S$32m, below 2012 S$39m purchase price

Nov 16, 2022

The seafronting bungalow along Cove Drive sold by Oswal has a land area of 15,930 sq ft.

Indian singer and businessman Shael Oswal is selling his seafronting bungalow in Sentosa Cove for S$32 million, or S$2,009 per square foot (psf) on land area of about 15,930 sq ft.

The amount is S$7 million or 18 per cent lower than the S$39 million he paid for the property, which is along Cove Drive, in 2012; Oswal bought the villa from surgeon Susan Lim and her husband Deepak Sharma.

The total loss for Oswal would be higher after taking into account, among other things, the additional buyer’s stamp duty (ABSD) he paid as well as the cost of sprucing up the property, which served as a holiday home for his family.

The bungalow, which has two storeys, an attic, a basement and a swimming pool, is on a site with 99-year leasehold tenure starting November 2006, leaving a balance of 83 years.

Sentosa Cove is the only place in Singapore where a foreigner who is not a Singapore permanent resident may seek approval to buy a landed home for their own use.

In the latest deal, Oswal is understood to be selling his Cove Drive villa to the family of Ivan Chin, a car enthusiast who already owns a string of properties in Sentosa.

Market watchers note that the psf on land price that Oswal is selling the property at is lower than S$2,419 psf for a transaction in February last year of a nearby sea-fronting villa, dubbed Copper House, on a 18,053 sq ft site also on Cove Drive.

That said, Oswal’s sale price is slightly higher than the S$1,941 psf fetched for a pair of adjoining bungalows, on the same street, fronting the sea and also transacted in February last year. These two bungalows were bought by the same owner, who received Urban Redevelopment Authority’s (URA) written permission this year to redevelop the combined site of 18,740 sq ft into a new villa.

The new owner of Copper House has also obtained URA’s approval to redevelop his property into a new bungalow.

In another recent loss-making deal in Sentosa, a Chinese citizen sold his villa on Ocean Drive facing the port and with views of the Marina Bay financial district in the background in August this year to a Taiwanese at S$18.5 million or S$1,961 psf on land area of 9,436 sq ft.

This is S$9.7 million or 34 per cent lower than the S$28.2 million (or a S$2,989 psf) at which the seller had bought the bungalow from its developer, Satinder Garcha, in October 2010.

S$2,989 psf is still believed to be the record psf price for a bungalow in Sentosa Cove.

Observers noted that the losses on these two deals are partly due to the properties being purchased at high prices during the heyday of the Sentosa bungalow market in 2010-2012.

At that time, the market was hyped up by speculative buying (including by foreigners), fuelled by low interest rates and high liquidity in the era of quantitative easing that followed the global crisis.

Also adding to the feel-good factor was the opening of the two casinos in Singapore (including one in Sentosa) in 2010.

In response, the government started rolling out cooling measures; the ABSD, in particular, hit foreign demand for big-ticket residential properties such as Sentosa bungalows, and their prices slipped. When Covid struck and several groups of cash-flush China citizens (including from Fujian province) were stuck in Singapore, they soon developed a liking for Sentosa with its waterfront villas as a change from being cooped up in their luxury condos on mainland Singapore.

Fujian factor

The full extent of property buying by Fujianese is not captured in URA Realis data as many of them carry out all-cash deals and do not lodge caveats. Often, they hold passports of several countries and declare a nationality other than China when making their property purchases – presumably to keep a low profile.

These China buyers’ presence in Sentosa has helped to support demand and prices of bungalows in the enclave. This, in turn, is enabling some local owners – who acquired their properties in the area a few years ago when prices were languishing – to exit with a gain.

A member of the family of Patrick Kho, the group managing director of Lian Huat Group, is understood to have sold a waterway-facing bungalow along Cove Grove last month at S$21 million (or S$2,288 psf), which is S$9 million or 75 per cent above the S$12 million (or S$1,308 psf) the family paid for the property in 2018. The buyer is understood to be the group CEO of insurer FWD Group, Huynh Thanh Phong. He is Vietnamese-Canadian.

Steve Tay of List Sotheby’s International Realty (List SIR) commented that with prices of waterway-facing bungalows above S$2,000 psf currently, some owners see this as an opportunity to sell if they can get good prices.

Tay has acted for sellers in two transactions of waterway-facing bungalows along Cove Grove this year. One was sold by a Singaporean family for S$21 million or S$2,076 psf in April; the other was sold by an Indonesian citizen based in Hong Kong last month (October) for S$22 million or S$2,396 psf.

“Sellers of both properties would be in the black, having developed the bungalows themselves on land parcels bought from a subsidiary of Sentosa Development Corporation,” said Tay.

While the buyers in both the above transactions are from China, Tay said that he has also seen an increase in viewings for Sentosa villas from potential buyers from Indonesia and Malaysia as well as Singapore.

“We have seen increased interest from foreign buyers following Singapore’s further relaxation of border controls in April this year,” he noted.

Singapore’s handling of the pandemic and its government’s transparency and efficiency in steering the republic through the Covid crisis have given foreigners who were thinking of relocating their families to Singapore for education and/or business, the confidence to do so, Tay added.

Family offices seen boosting luxe property demand

List SIR’s research director Han Huan Mei added: “As Singapore is emerging as Asia’s family office hub, its low-tax regime and proximity to South east Asian growth markets have been able to draw the ultra rich from all over the world. Some of these people would buy luxury homes and settle here.”

Jacqueline Wong, executive director of Savills Private Office, highlights that foreigners and PRs who are granted approval by the Singapore authorities to buy a landed house in Sentosa Cove have to use it for their own occupation only. “Such buyers are unable to lease out their homes.” she said.

“However, Singaporean owners have the option to lease out landed homes on Sentosa Cove. Due to the overall shortage of bungalows for lease in Singapore in prime locations, including niche areas like Sentosa Cove, we have seen rents in this waterfront housing district increasing anywhere from 20 per cent to 60-80 per cent in the past three months,” Wong added.

The upper price band applies more to villas on Sentosa that are on the larger land plots of 15,000 sq ft and above, she added.