Sentosa Cove bungalow buying revs up

This year’s tally includes three bungalows on Pearl Island (above) at between S$16 million and S$21 million. Buyers of all three units are from China. Late last year, another villa on Pearl Island was sold for S$16 million to a Chinese couple. PHOTO: SRIF

The Business Times25 Sep 2020

ACTIVITY in the bungalow market on Sentosa Cove has revved up in the past few months on the back of several demand drivers, including buyers from mainland China.

Year to date, at least 10 villas in the waterfront housing district have been transacted – including deals for which buyers have not lodged caveats. This is up from six transactions last year, according to agents.

At least another two deals are currently pending, subject to approval from the Land Dealings (Approval) Unit of the Singapore Land Authority.

Sentosa Cove is the only place in Singapore where a foreigner who is not a Singapore permanent resident may seek approval to buy a landed home for their own use.

List Sotheby’s International Realty (ListSIR) senior associate vice-president Steve Tay forecasts that 2020 could end with at least 15 deals, given the current level of viewing activity by potential buyers looking for a home for owner occupation. “These comprise a good mix of nationalities, not only buyers from China but also Indonesia, Malaysia, India and Singapore.”

This year’s tally includes three bungalows on Pearl Island, one of five man-made islets in Sentosa Cove, which were transacted in August and earlier this month at between S$16 million and S$21 million each.

These are net prices (excluding discounts and incentives such as furniture provided by the developer in show unit) and work out to S$1,725 per square foot to S$2,000 psf on land areas of about 9,270 sq ft to 11,667 sq ft.

The three villas transacted recently are part of a clutch of 10 bungalows on Pearl Island that Singapore-incorporated SRIF Pte Ltd acquired in 2016.

SRIF is wholly owned by Vincent Ong and Leslie Lim, co-founders of Evia Real Estate.

Buyers of all three units are from China; they are not Singapore permanent residents (PRs) which means they would have paid 20 per cent in additional buyer’s stamp duty on top of the standard buyer’s stamp duty of up to 4 per cent.

Late last year, SRIF sold another villa in Pearl Island for S$16 million to a Chinese couple.

Recently, it granted an option to purchase (OTP) for another villa on Pearl Island – also to a buyer from China – but the deal is subject to the LDAU’s nod, BT understands.

SRI co-founder Bruce Lye says the mainland Chinese who have been shopping for bungalows in Sentosa Cove already own penthouses or apartments in Districts 9 and 10 that they have bought over the past few years.

“Some of them have been wanting to own a landed home here and while being stuck in Singapore due to travel restrictions amid the pandemic, they have had some time to explore their options. And not being Singapore citizens (yet), Sentosa Cove is the obvious choice.

“It may be a case of herd instinct. Once one of them buys a property in a particular segment – in this case a bungalow in Sentosa Cove – their friends tend to follow suit.”

Market watchers note that buyers from China would not have much of an issue with the 99-year leasehold tenure of properties on Sentosa Cove as land tenures in their home market are even shorter at 60-70 years.

The buyers of the three Pearl Island villas sold by SRIF this year have not lodged caveats and hence the sales are not reflected in the URA Realis caveats database.

Also sold this year but not caveated is a bungalow in Cove Drive facing the golf course that was bought for S$9.5 million by a Singaporean couple, BT understands

Among the deals this year captured in Realis, is a S$22.8 million (S$2,863 psf) sale of a property in Cove Drive facing the sea and with views of the Southern Islands. The buyer is understood to be Lee Tih Shih, who sits on the boards of Lee Foundation and OCBC, among others.

The villa which Dr Lee is buying is near a property in Cove Grove that Fragrance Group boss Koh Wee Meng sold for S$24 million or S$2,464 psf earlier this year to an Indonesian who is a Singapore permanent resident.

Other caveated deals this year include three properties in Lakeshore View and one on Paradise Island.

Also included in URA Realis data is a property on Sandy Island for which an option to purchase was granted by the current owner to a foreign buyer in early January for S$16.8 million or S$2,044 psf. However, word is the deal has not progressed any further and the house is vacant.

ListSIR’s director of research, Han Huan Mei, said that in view of the Covid-19 situation, most owners have become more realistic in their price expectations. “Hence it is a opportune time to enter the Sentosa Cove market.”

Her colleague Mr Tay said: “It is not an exaggeration to say that bungalow prices in Sentosa Cove have eased by about 40 per cent from the peak in 2010-2012. At current levels, buyers are finding it attractive to acquire a landed home in this district, offering a unique, island-resort lifestyle for their family.”

Ms Han added that the lower interest rate environment is also helping to fuel deals.

Pearl Island, comprising 19 bungalows, was developed by Ximeng Land (S) Pte Ltd, controlled by a Liu family from Beijing. It had sold nine of the villas before SRIF purchased the equity of the company under the 2016 transaction.

Following its takeover by SRIF, Ximeng sold the first of the remaining 10 villas on Pearl Island in 2017 for S$16.55 million or S$1,851psf.

Assuming the potential buyer that was recently granted the OTP receives LDAU’s nod, SRIF would have moved six of the 10 villas acquired.

The remaining four villas available are priced at between S$13.56 million and S$15.31 million.

Ximeng developed the project on a site with 99-year leasehold tenure starting from March 2008. The project was completed in 2012.

All 19 bungalows have three storeys and a basement. Each house comes with its own private lift, a swimming pool and berth.