The hotel and property group, OUE, is no longer considering the conversion of part of its Twin Peaks project into serviced residences. However, it will be keeping one of the two towers aside for bulk selling deals. According to The Straits Times, it is understood that the firm is currently in talks with a few parties who are showing interest in particular types of units as well as certain floors.
In February, the Temporary Occupation Permit for the project was obtained, which gives the project until February of 2017 to shift all of its units to avoid being charged with any Qualifying Certificate fees.
Twin Peak Project
Earlier this year there was talk that had emerged regarding developers who were seeking to convert any condo units that were unsold into serviced flats as a means of avoiding these penalties, a move that was flagged in 2013 by OUE. However, it was made clear by the Singapore Land Authority that the deadline of 2 years would still be applicable for such units.
According to caveats recorder, of its 462 units, 81 have been sold in the 35 floor Twin Peaks project. During its recent relaunch, the project is said to have generated more sales. It has also been said that prices have been cut to around $2,600 per square foot for its relaunching, in comparison to when the project was first launched in 2010 with an average price of $2,870 per square feet.
The project may face some challenges however, it making any bulk sales deals due to the units not being under any SPV (special purpose vehicles), which is usually the sales method preferred. Any prospective buyers that are looking to acquire one of these units will have to pay up to 15% in Additional Buyer’s Stamp Duty, meaning that pricing needs to consider this in order to make the deal more attractive.
The Terrace Project in Punggol
However, the price trimming at Twin Peaks may not have been enough just yet. For example, a 11.2% drop has been seen for non-landed luxury private housing prices from its 1st Quarter 2013 peak.
One analyst pointed out that successful sales previously included a sale of shares, or in some cases where done after the ABSD had been taken into account, giving buyers some value.
Even though there are a number of family offices and stock unsold is abundant, both funds and individuals are keeping a close eye on any opportunities from high end properties and units that are priced reasonable or under SPVs are still a bit rare.
Kheng Leong The Terrace
With retail investors also wanting these lower prices, developers are finding it a bit difficult to drastically cut pricing on bulk deals.
Some earlier transaction of bulk sales includes the condominium Draycott Eight’s 23 units, which had been sold through a special purpose vehicle for around $150 million for the 3rd Quarter.
There are also a few projects which are believed to be preparing bulk sales, including iLive and Grange, Cliveden at Grange and Skyline Residences.