Foreign buyer’s Sentosa Cove deal falls short

Source : Business Times – 16 Nov 2009

One of his two adjoining plots was resold at same price, other up for grabs

A FOREIGN investor who bought two adjoining bungalow plots on Sentosa Cove in 2008 did not complete the transactions, it has emerged.

Sentosa Cove has since re-sold one of the plots to a local buyer at the same price that the foreign investor had offered for it – $1,688 per square foot (psf) of land. But the other land parcel is still up for sale.

The plot that was re-sold has a land area of about 9,700 sq ft, which means that the total amount paid for the site is about $16.4 million.

The land parcel was first put on the market in March 2008, and sold at the end of that year through a private treaty. But after the foreign investor, who is understood to be a Chinese national, did not make payment according to schedule, the plot was put on the market again. It was sold to the local buyer about two months ago.

Sentosa Cove’s general manager Jason Yeo said that the fact that the plot was re-sold for the same price as in 2008 shows that the fundamentals of the residential enclave on Sentosa island are intact.

His firm, which handles State land sales at Sentosa Cove, received offers to buy the property at lower prices. But he held on to it until someone offered the right price.

However, the second plot, which is slightly bigger, has not yet received an offer deemed to be acceptable. The parcel, which is around 12,000 sq ft, was sold for about $1,650 psf to the foreign investor. The total quantum works out to around $19.8 million.

‘There has been interest from the market for the site, but they are not able to meet our reserve price,’ said Mr Yeo. Sentosa Cove is not aggressively marketing the site, he said.

The land parcel is the only one to remain unsold in the entire Sentosa Cove residential precinct, which will have 8,000 residents by the time all homes there are completed by 2014.

Mr Yeo said that all earlier land transactions – including condominium sites sold to developers as well as landed plots sold to individuals and investors – have been completed. Work on the island is progressing well and some 3,000 residents will be living on the island by the end of this year, he added.

Sentosa Cove has also found takers for some of the commercial space on the island. Two tenants – 7-Eleven, which will open a convenience store with a new-to-Singapore concept, and a launderette – have taken up about 30 per cent of the commercial space available at the arrival area of the Sentosa Cove residential enclave. The arrival plaza has a total lettable area of about 10,000 sq ft.