WHILE well-heeled mainland Chinese who flocked to Singapore last year to buy luxe condo units have been kept away by the Covid-19 outbreak, several big-ticket deals were sealed in the first two months of this year.
These recent purchases were made by buyers already based here.
Some of these deals entail developers of completed condo projects selling two adjoining apartments on the same day to different buyers. However, signs point to the buyers being related parties, probably from the same family, who could potentially be looking to amalgamate these units to create a more spacious one.
Splitting up purchases of adjoining units between different family members may also result in savings in additional buyer’s stamp duty (ABSD); this depends on the profile of the buyer (whether a Singaporean or permanent resident or PR), and the number of existing residential properties they own here. US citizens enjoy the same treatment as Singapore citizens for the ABSD under the US-Singapore Free Trade Agreement.
Savills Singapore executive director of residential services Jacqueline Wong said: “Typically, such buyers are ultra-high-net-worth foreigners or Singapore PRs who require larger properties of above 6,000 to 8,000 sq ft, with at least five to six bedrooms. As they face restrictions in buying landed properties on mainland Singapore, coupled with a limited supply of penthouses, amalgamation is a practical option for them.”
She acknowledged that the trend is not altogether new, though it seems to have picked up steam lately because of a lack of brand-new big units being built in the prime districts. “Typically, new launches in prime districts offer only smaller four-bedroom units of around 2,500 to 2,800 sq ft at most.”
Agreeing, List Sotheby’s International Realty (ListSIR) director of research, Han Huan Mei, noted that developers are building smaller units to meet the demands of price-sensitive buyers, as well as to maximise the land use of the development.
“Brand new, centrally-located and prime luxury developments with single-level apartments of more than 5,000 sq ft are extremely rare and appealing to discerning investors who enjoy the luxury of space,” she said.
List SIR senior associate vice-president Steve Tay said: “Some people find greater space efficiency in terms of usable area by having a single-level residence in a condominium – rather than in a duplex or penthouse.
“Unless it is very well designed, the top level of a penthouse – where there is typically a roof terrace and/or pool – tends to be underutilised in the day-time, given Singapore’s hot and humid climate.
“That said, some ultra-high-net-worth individuals (UHNWIs) see the value of owning a penthouse for its prestige, perched at the apex of a development and with no neighbours on the same floor.”
At The Ritz-Carlton Residences Singapore, Cairnhill, two adjoining three-bedroom units of 2,831 sq ft each on a mid floor were transacted on the same day early last month. Each apartment was sold at S$3,582 psf or S$10.14 million, or a total of S$20.28 million.
The Business Times understands that both units were sold by the project’s developer, Royce Properties, to separate buyers, though both of them are understood to be China citizens who are also Singapore PRs; indications are that they are connected.
Completed in 2011, the freehold project has a single 36-storey tower, with just two units per floor.
At the 33-storey Le Nouvel Ardmore developed by Wing Tai, two adjoining four-bedroom apartments of 3,800-plus sq ft on an upper level were transacted on the same day in January.
One is understood to have been acquired by a Singaporean for S$17.2 million and the other, by her US citizen-husband for S$15.8 million.
On a nearby floor, separate deals were entered into on the same date last month for a pair of four-bedroom apartments in the region of S$15.9 million apiece.
A man holding China citizenship and a Singaporean woman, directors of a family-office outfit incorporated here, are said to be buying one unit; the woman is also purchasing the other unit, but as a trustee (with the beneficiary likely to be a child).
In each of the above three cases, there are only two units per floor.
List SIR’s Ms Han said: “By buying two adjacent units, the investor can combine both to create a mega apartment for the enjoyment of space and a luxury lifestyle.
“Even if the two units aren’t combined, the owner can enjoy the privacy of having the whole floor to himself and his family.”
Observers note that some developers design projects that give buyers the flexibility to buy two adjoining units and to amalgamate them if they would like to create a more spacious home.
An example is The Ritz-Carlton Residences, Singapore, Cairnhill; from three bedders to penthouses, each floor has just two units, with mirror-image layouts. The two units can be amalgamated by knocking down the common wall in the living room.
ListSIR said the trend of buying adjacent units in luxe developments is likely to continue, especially as Singapore continues to develop into a global city and financial hub in Asia.
Savills’ Ms Wong said some buyers who want a bigger home are open to vertical amalgamation, that is, purchasing two units, one stacked above the other, and combining them into a single home by creating an internal staircase linking the two units.
This option is less common than amalgamating units on the same level, she said.
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