$15.8m loss in St Regis penthouse sale 'small change' for Japanese billionaire

Billionaire ex-owner of unit known for making bold bets in real estate

The Japanese billionaire who suffered a record $15.8 million loss when he offloaded a penthouse in Tanglin Road is not one to shy away from making aggressive bets in real estate.

Mr Katsumi Tada, 69, president of Daisho Group, is known for paying top dollar to land prized assets that seem to promise future earnings.

The purchase of The Westin Singapore hotel in Marina Bay by his Daisho Group for a record-smashing $1.5 million per room in December 2013 is a case in point.

The landmark deal was the company's maiden purchase in Singapore and came as the local hotel sector faced headwinds from declining room rates and new completions.

However, analysts noted then that "Daisho is buying into the future", as the hotel's Marina Bay location could face an undersupply of rooms as the area develops.

Mr Tada set another record in 2007 when he paid a whopping $28 million - or $4,654 per sq ft (psf) - for a plush 6,017 sq ft penthouse at St Regis Residences in Tanglin Road.

This broke the previous psf benchmark of $4,200 paid for a four-bedroom unit at Chyau Fwu Group's 35-unit Parkview Eclat in Grange Road.

The purchase represented a remarkable gain of $12.77 million for the seller, also a foreigner, who had paid $15.23 million - or $2,530 psf - to developer City Developments in August 2006.

Now, Mr Tada has set a record of a different kind by selling the penthouse for a bargain-basement $12.2 million, or $2,028 psf, racking up the biggest loss suffered on an apartment sale here.

The sale - to Yun Nam Hair Care owner Andy Chua - at a price well below market value has baffled analysts, who noted that the $12.2 million would be "pocket change" for Mr Tada, who is estimated by Forbes to be worth about US$1.7 billion (S$2.4 billion).

The Straits Times understands that Mr Tada, who also bought a smaller 3,897 sq ft home at the 173-unit St Regis project for about $11.6 million, had been trying to sell both for more than two years. Three units in the development, spanning 2,153 to 4,941 sq ft, have changed hands for between $1,923 psf and $2,276 psf in the past two months.

Ms Christine Li, research director at Cushman & Wakefield, said the billionaire could have just been rebalancing his portfolio of investments as opportunities appear elsewhere.

"To him, a $15.8 million loss is not a big deal. A lot of billionaires buy properties and leave them vacant because rental income is negligible to them and holding costs aren't that high," said Ms Li.

The penthouse is said to have been vacant all this while - another factor which could have led to a "deterioration" of the unit, said a veteran market watcher who did not wish to be named.

"Since he didn't stay in it, he could have realised the unit was not what he wanted. For the obscenely rich, they can do anything they like."

Another analyst added that the absolute loss could have been smaller than what was recorded, thanks to tax considerations and currency conversions, as the Singapore dollar has strengthened against the yen.