Singapore's second-largest developer has a suggestion for the Government: reposition the billionaire enclave of Sentosa as a tourism mecca like Bali.
Property values at Sentosa Cove, a residential area nestled on a tiny island off the south coast, have been hit particularly hard, with home prices down about 30 per cent from the highs seen in 2010. Even as the rest of the nation's residential market staged a recovery in the first half of last year, Sentosa remained in the doldrums.
City Developments Limited (CDL) executive chairman Kwek Leng Beng has had enough.
"Sentosa was touted when it first started for the rich and famous," he said on Thursday at the release of the company's fourth-quarter earnings. "Subsequently, her parents just forgot about this young lady. I would like to suggest that they should reposition it as the new Bali."
What used to be Sentosa Cove's main strength has become a liability. The island is the only place in Singapore where foreigners can buy landed property. But with stamp duties doubling to 20 per cent since 2011 for international buyers, compared with just 3 per cent for locals, the waterfront oasis is suffering. Multimillion-dollar homes sit empty, and along Quayside Isle, a stretch of restaurants near the marina, businesses have been shutting.
CDL has good reason to want Sentosa to succeed.
In 2014, it struck a deal with Blackstone Group and CIMB Bank to raise additional capital from a hotel, retail and residential project it had developed earlier. In exchange for $469 million, Blackstone and CIMB agreed to receive 5 per cent fixed interest for five years, and a share of the project's cash flows.
The developer on Thursday said it is "working with its partners on a mutually favourable way to unwind the structure before its expiry in December 2019". With many units in the residential part of the project unsold, CDL needs demand, and prices, to revive.
A spokesman for Blackstone declined to comment.
Mr Kwek said the non-residential part of Sentosa could be better utilised for meetings and conferences. Meanwhile, the island's hotels - and there are several new ones opening - could attract more visitors.
"You go to Bali now, it's very congested. It's got volcanoes, weather problems, flooding problems and traffic problems. Why is it so popular?" he added.