Renewal of interest in Marina Bay apartments

Source : The Edge – 8 Jun 2009

As market sentiment picks up, not only has the number of transactions increased, but prices have also firmed up across the board. The clearest evidence of this is at Marina Bay, where apartments have seen a spike in the number of transactions in the secondary market.

At the 1,111-unit The Sail, which was completed in 4Q 2008, the most recent transaction was a 50th floor, 2,174 sq ft apartment that changed hands in the resale market for $4.1 million, or $1,886 psf. The initial owner bought the property at launch in 2004 for over $2.385 million, or $1,097 psf, so he has seen a 72% capital appreciation on the apartment in about five years.

There are signs that specu-investors have also returned and, if anything, this marks a return of optimism to the property market.

In late April, a 657 sq ft apartment on the 52nd floor was sold for $951,200, or $1,449 psf. The same unit changed hands a month earlier at $867,240 ($1,321 psf), according to a caveat lodged in early March. The last time the unit changed hands in a sub-sale was in early 2007, when it went for $952,650, or $1,451 psf. The original owner had purchased the unit in early 2005 for $576,180,or $878 psf.

“There is a relatively strong buying interest in the market recently,” says Jack Chua, president and executive director of ERA Realty. “Confidence is back in the market; investors who are cash-rich are looking again at property as a form of investment.”

At the 428-unit Marina Bay Residences expected to be completed by mid-2010, there were four transactions ranging from $1,581 to $1,880 psf for caveats lodged from May 1 to 15. The highest price achieved in terms of price psf at the upscale condominium in that timeframe was for a 44th floor, 1,959 sq ft apartment that changed hands in the sub-sale market for $1,880 psf, or a total of $3.68 million.

According to caveats lodged earlier, this unit was one of 10 on the same floor scooped up en bloc by a single party for a total of $23 million, or an average of $1,830 psf. The original transaction was when the development was launched in December 2006.

The first of the 10 units to change hands in a sub-sale was a 1,636 sq ft unit that went for $3.779 million, or $2,310 psf, in June 2007, according to a caveat lodged with URA Realis. The second was the following month — a 1,130 sq ft unit sold for $2.46 million, or $2,180 psf. Subsequently, in August, a third unit was resold — a 732 sq ft unit that went for $1.79 million, or $2,450 psf. The seller pretty much rode the crest of the property boom, with most of the sub-sale prices achieved above $2,000 psf.

There was a lull for about a year before the next transaction in September 2008, when a 710 sq ft apartment changed hands in a sub-sale for $1.25 million, or $1,760 psf. In January this year, a 1,055 sq ft unit was sold for $1.728 million, or $1,638 psf; in April, a 1,227 sq ft apartment was sold for $1.94 million, or $1.580 psf; while the most recent transactions were in the first two weeks of May, as mentioned above.