23 Oct, 2009
OUE resells freehold plot for tidy profit
The Parisian fetches $283m in the third-costliest private housing land sale in terms of psf pricing
By Fiona Chan
LESS than three years after The Parisian condominium at Angullia Park was sold en bloc, the site has changed hands again - this time at a much higher price.
Overseas Union Enterprise (OUE), which bought the freehold site for $228.1 million in December 2006, has resold the parcel for $283 million, it said in a statement yesterday. The site has been valued at $261.1 million.
The sale price works out to $2,058 per sq ft (psf) of potential gross floor area, making it the third most expensive private residential land sale ever. Only Westwood Apartments in Orchard Boulevard, at $2,525 psf, and The Ardmore at Ardmore Park, at $2,337 psf, were pricier.
The buyer is China Sonangol Land, the property arm of China Sonangol International Holding, an oil and gas company that is also involved in reconstruction and infrastructure projects.
The break-even price works out to about $2,500 to $2,600 psf, said property consultancy CB Richard Ellis (CBRE), which brokered the deal. Depending on the launch date, the finished units could sell in the region of $3,500 psf, it said.
This is the Chinese company's first purchase in Singapore but it may not be its last, said CBRE's executive director for investment properties, Mr Jeremy Lake. 'We believe they are still interested in Singapore, and once this project has proven successful, they may look for other sites here.'
Industry watchers said the sale may reignite interest in Singapore's luxury home market, which has been subdued amid the financial crisis and the global recession as foreign buyers stayed away.
The completion of the two integrated resorts next year could attract more well-heeled foreign buyers in 2010 and 2011, and overseas developers such as China Sonangol Land may be posi-tioning themselves for a potential rally in the high-end market, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. 'It looks as though it is still foreigners who are willing to pay high prices currently,' he said.
In a segment of the market that has not seen many land sales recently, the transaction of The Parisian is a 'fresh reference point' for prime land prices, said Mr Lake. It will give a boost to developers still holding on to expensive land in the Orchard area, waiting for the right time to launch their projects.
But while the sale may demonstrate that developers' appetite for high prices is back, Mr Lake does not expect many similar deals to occur after this. Most developers buy their land from the Government or through collective sales, simply because there are few developers who resell sites they have bought.
A sale like that of The Parisian is particularly rare because OUE had already demolished the condo and started piling works on the site.
In a statement yesterday, OUE said the sale of The Parisian will allow it to focus its resources on its larger development property, The Grangeford. It said it is still committed to the property development business and intends to launch The Grangeford in due course.
OUE incurred a net loss of $47.8 million for the second quarter ended June 30, largely due to impairment losses for The Parisian and The Grangeford, as luxury property values slumped in the recession.
Martin Koh/ Sherry Tang