SINGAPORE - Unsold units at The Residences at W Singapore Sentosa Cove will be up for sale at more than 40 per cent off their initial 2010 launch price.
Cityview Place Holdings, which owns 203 units at the development, will be releasing 58 units for sale on April 15, with prices starting from $1,648 per square foot (psf).
Cityview is an associate of City Developments (CDL), which is the developer of the 228-unit upscale condominium.
A Cityview spokesman told The Straits Times it is extending an offer price for these selected units as there has been increased interest and sales activity in Sentosa Cove properties in recent months.
Over the past week, property agents have been circulating pricing details and floor plans to potential buyers and inviting them to a preview of the property from April 10 to 14.
The 99-year leasehold condominium, which is part of the W hotel brand, was launched for sale during the property peak in 2010.
Back then, its two- to four-bedroom units and penthouses, with sizes from 1,227 sq ft to 6,297 sq ft, were priced from $2,500 psf to $3,000 psf.
But sales of condo units in Sentosa were hit by a series of property cooling measures introduced from 2010.
When the project was completed in 2011, cooling measures were further tightened with the introduction of the additional buyer’s stamp duty (ABSD).
Urban Redevelopment Authority data showed only 20 caveated transactions for the development to date – all in 2010 – with just five units resold from 2012 to 2023.
A caveat is lodged with the Singapore Land Authority and it secures a property for the buyer. But not all buyers lodge caveats.
Prices of condos in Sentosa Cove – aimed at the ultra-rich with its resort-living lifestyle – tumbled by about 40 per cent from 2010 to a median price of $1,394 psf in 2020.
The Covid-19 pandemic sparked a turnaround for Sentosa Cove homes, driven by shifts in lifestyle preferences during that period, anticipation of potential movement restrictions, and working from home becoming a norm.
Prices started rising in 2021 and hit a median of $2,215 psf in 2023.
In June 2022, developers IOI Properties and Ho Bee Land decided to put up units at Cape Royale for sale at $2,200 psf, nine years after their project was completed.
The developers had rented out the 302-unit condo after its completion in 2013, as sale prices were falling following two rounds of property cooling measures back then.
The move came at a time when demand for luxury apartments was rising, with unsold inventory of private homes at a multi-year low of 14,087 units as at March 31, 2022.
Market observers noted that the unsold units at The Residence at W Singapore will be launched at a time when fewer units are changing hands in the luxury property market.
A CBRE market report in March noted a decline in sales for the luxury apartment sector in the second half of 2023, following the doubling of ABSD levied on foreigner buyers to 60 per cent in 2023.
Ms Tricia Song, CBRE head of research for Singapore and South-east Asia, expects transaction volumes in the Singapore luxury residential market to remain subdued in the first half of 2024.
She attributed the continued softening of sentiment to economic uncertainties, cooling measures and ongoing money laundering investigations.
“In addition, despite stable rental yields, some owners may be compelled to put up their properties for sale due to the rise in property tax bills for high-value properties,” said Ms Song.
CDL in 2014 partnered US investment giant Blackstone and Malaysia’s CIMB Bank to create a platform that would invest in the cash flows of CDL’s properties in Sentosa Cove, which include five-star hotel W Singapore, a retail property and The Residences at W. A total of $1.5 billion was raised in the deal amid a soft property market.
At the end of 2023, Blackstone sold its interests in the project to US investment firm BlackRock.
Mr Nicholas Mak, chief research officer at property portal Mogul.sg, noted that the median prices of condo units in Sentosa Cove are currently at about $2,000 psf, higher than before the pandemic. Residential rental rates are likely to soften in 2024, in line with the overall rental market, he added.
“As the investment platform depends on rental cash flow, which could soften in the coming year, it is a good time to sell the units now,” he said.
BlackRock and CDL did not respond to questions about the timing of the sale and factors influencing the pricing of the units.
Market observers were surprised by the starting selling price of around $1,600 for The Residences at W, and described the decision as one aimed at achieving rapid sales.
“It is essentially priced to sell,” said Mr Mak, who added that another reason for the notably lower price could be the 2023 ABSD hike, which has greatly reduced foreign demand.
This release of new units could increase sales and excitement in the Sentosa Cove sub-market, he said.
But Mr Mak also cautioned potential buyers who are hoping to make capital gains that Sentosa is less accessible than homes on the mainland, and it might take an extraordinary event like the pandemic or an easing of property cooling measures for prices in Sentosa Cove to rise again.
