Staking a claim in the new Singapore By Sonia Kolesnikov-Jessop Friday, January 4, 2008 c/o IHT

Staking a claim in the new Singapore
By Sonia Kolesnikov-Jessop

Friday, January 4, 2008
SINGAPORE: When the master developer of Sentosa Cove, an exclusive oceanfront residential community here, started selling land to individual builders in 2003, the first plot went for 350 Singapore dollars per square foot. In July, during the most recent land auction for a condominium site, the price was 1,799 dollars a square foot.

"Back in 2003, it was an untested market and the sale came right after SARS," recalled Nicholas Chua, the business development and marketing manager at Ho Bee Group, which paid the equivalent of $203 a square foot at the time. "The confidence level in the property market wasn't that great." Now, Ho Bee owns six development sites there.

The luxury development's success partly reflects the underlying strength of Singapore's property market, which is expected to increase by as much as 30 percent this year, estimated Tay Huey Ying, director of research and consultancy at Colliers International real estate in Singapore. It also has benefited from the government's 48-hour fast-track approval program for foreigners who want to buy homes or land in the development as well as plans to build a resort featuring a casino and Universal Studios theme park nearby.

"The product wasn't a success at the beginning because it didn't look interesting to the market, especially after the Dubai Palm and The World were launched in Dubai," said Ku Swee Yong, director of marketing and business development at Savills Singapore. "It was after mid-2005, when the casino was announced, that buyers become more confident in the Cove's prospects."

"Solid marketing has also helped," Ku said. "Developers will do well to take a leaf from the books of Sentosa Cove. The packaging has been so successful that investors who failed to secure a plot of land there still aspire to live there.

"I hope they will continue to sustain the brand name years after the Sentosa integrated resort has been completed and packed in with tourists," he said.

In the space of a few years, Sentosa Cove, the only residential development on Sentosa Island, has become one of Southeast Asia's most exclusive and expensive addresses, with three-bedroom condominiums selling for 5 million dollars and free-standing properties selling for 15 million.

The Cove has been marketed as "the world's most desirable address" — a poster child for the "new" Singapore, which is trying to reinvent itself. In recent years, the city-state of 4.5 million has polished up its image as a dull place by developing a vibrant nightlife and art scene, announcing plans for two integrated resorts with casinos (including a family resort on Sentosa), and scheduling its first Formula One Grand Prix on Sept. 28.

On the economic front, the country also has become an important financial hub for private banking and hedge fund management, luring hordes of well-heeled bankers that splash out on high-end properties.

Sentosa Cove is divided into two gated communities, covering 117 hectares, or 290 acres, 60 percent of which has been reclaimed from the sea. It has a members-only marina with a few berths for mega yachts and a 320-room W Hotel is being planned.

When completed in 2010, the community of oceanfront, waterway-facing and fairway-flanking properties is to total 2,500 homes, including 400 free-standing structures, and 2,100 condominium units. So far, only around 275 homes have been completed.

At this point, more than half of the Cove's buyers are foreigners, developers say.

Sentosa Cove was inspired by Port Grimaud, the 40-year-old lagoon development in the south of France designed by the late François Spoerry. "Our vision was to create one of the most desirable oceanfront residential communities," explained Kemmy Tan, general manager of Sentosa Cove Pte, the project's master planner and developer. "But we also realized we needed to adapt Port Grimaud's concept to a tropical setting."

So far, the company has sold more than 3 billion dollars in land to individual developers; buyers get only 99-year leaseholds on land.

The Cove's property prices have moved up faster than the rest of Singapore's because the overall development started from a lower base, Chua said. Units in Ho Bee's first condominium, The Berth by the Cove, sold for 800 dollars per square foot when they were first offered for sale in 2004. Today, the apartments resell for about 1,800 dollars per square foot.

Meanwhile, a unit at the uncompleted Oceanfront condominium re-sold recently for 2,550 dollars per square foot. The seller initially bought the unit in September 2006 for 1,750 dollars per square foot; the resale produced a profit of more than 2 million dollars.

Since the start in September of sales of its latest condominium, The Turquoise, Ho Bee has sold 40 of the 55 available units, with prices averaging 5.2 million dollars for a three-bedroom condo and 6 million for a four bedroom.

"People have many reasons for buying on Sentosa. Some love the sea and have a boat they can moor there, others buy because they want to be close to two championship golf courses, and it is 15 minutes away from the financial district," Chua noted.

Jenny Chua, chairwoman of Sentosa Cove Pte, adds that the gated communities offer greater privacy to home buyers. "Obviously this is not a security issue here, but more of a lifestyle decision," she added.

Attention now is focused on the land tender for The Pinnacle Collection, a planned 20-story condominium structure that will be the tallest building on the island and will offer panoramic vistas of the South China Sea, the Southern Islands and the city skyline. The tender closed Dec. 12 and the result should be announced this month.

"The Pinnacle Collection is the last condominium parcel at Sentosa Cove and can categorically be classified as the best. It is anticipated that this will be the most coveted parcel of all, due to its strategic location at the entrance of the marina leading into Sentosa Cove," said Li Hiaw Ho, executive director at CBRE Research in Singapore. Li believes that bids for the undeveloped site will exceed 2,000 dollars per square foot.

All of the buildable land on Sentosa Island will be sold by the end of 2008 but would-be home buyers will still have plenty of opportunities. Ho Bee is planning to sell a 150-unit condo, the Seaview, in the second quarter, while Lippo Group will start selling the Marina Collection and City Development will sell apartments in the Quayside Collection.

Also, sometime this year Elevation Developments will sell apartments in the Cove's only development facing the Sentosa Golf Club's Tanjong Course. The company is considering hiring the renowned architect Zaha Hadid for the project, which should have 20 units of about 6,000 square feet each, each with its own pool, said Satinder Garcha, chief executive of Elevation Developments. At current market prices, Garcha estimates each will sell for about 9 million dollars to 10 million dollars.

The reputation of the Italian architect Claudio Silvestrin probably has made the 18-villa development on Sandy Island, one of the manmade islands in the Cove, one of the area's most anticipated projects.

Silvestrin designs Giorgio Armani's stores; the landscaping will be done by Jamie Durie, an Australian who occasionally appears as a garden consultant on Oprah Winfrey's show.

The villas will range in size from about 6,500 square feet to 12,000 square feet and each will come with a boat berth and private pool. Genesis-Alliance (YTL Companies) will offer them for sale sometime during the first quarter of the year.