OUE not pursuing conversion of Twin Peaks condo

Property and hotel group OUE is no longer looking at converting part of Twin Peaks into serviced residences, but is keeping one of two towers at the project aside for bulk sale deals.

The firm is in talks with some parties interested in certain floors or certain types of units, The Straits Times understands.

The project obtained its temporary occupation permit (TOP) in February. This gives it until February 2017 to sell all units before incurring any Qualifying Certificate (QC) extension charges.

Some talk emerged earlier this year about developers looking to convert unsold condo units into serviced apartments to avoid these penalties. OUE had flagged such a move in 2013.

However, the Singapore Land Authority then clarified that the two-year sales deadline would still apply for such units.

The 35-storey Twin Peaks has sold about 81 of 462 units so far, according to caveats. It is believed to have chalked up more sales at its relaunch on Tuesday last week.

Prices are also believed to have been trimmed for its relaunch to about $2,600 per sq ft (psf), compared with an average price of about $2,870 psf when the project was launched in 2010.

There may be some challenges in striking a bulk sale deal for the project, as the units are not held under a special purpose vehicle (SPV) - typically the preferred method for such sales. Parties who wish to acquire units will need to pay up to 15 per cent Additional Buyers' Stamp Duty (ABSD) - and pricing would then have to be very attractive to take that into account.

But prices at Twin Peaks may not have fallen far enough yet. Savills' basket of luxury non-landed private home prices has fallen 11.2 per cent from its peak in the first quarter of 2013, for example.

Mr Alan Cheong, Savills Singapore research head, noted that previous successful transactions all entailed sales of shares, or were done where, after taking into account the ABSD, there was still value for the buyers.

So, while many family offices, individuals and funds are looking closely at high-end properties for opportunities, and unsold stock is plentiful, units that are under SPVs or reasonably priced are still few and far between, said Mr Ian Loh, Knight Frank head of investment and capital markets.

"It is difficult for developers to cut prices too drastically for bulk deals, as retail investors would also want the lower pricing."

Earlier bulk sale transactions include 23 units at the Draycott Eight condo which were sold via an SPV for about $150 million in the third quarter.

Some projects believed to be attempting bulk sales include Cliveden at Grange, iLiv@Grange and Skyline Residences.

A version of this article appeared in the print edition of The Straits Times on November 20, 2015, with the headline 'OUE not pursuing conversion of Twin Peaks condo'. Print Edition | Subscribe