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RECORDS have been sent tumbling at the ultra-luxurious St Regis Residences with at least one buyer shelling out more than $16 million for a penthouse - the highest lump sum ever paid for a condominium apartment here.

The astonishing price trounced the $16 million fetched by a unit at SC Global’s The Boulevard Residence last month.

Another record to go was the price per sq ft (psf), with one St Regis unit selling for slightly more than $3,000 psf, trumping the $2,400 psf mark set in the mid-1990s at Wheelock Properties’ Ardmore Park.

The unnamed European who bought the $3,000 psf St Regis unit also snapped up two other apartments in the luxury project, which was formally launched yesterday after a series of private preview sales.

St Regis, a 999-year development bounded by Tanglin Road, Tomlinson Road and Cuscaden Road, has 173 units across two 23-storey towers.

It is jointly owned by three Hong Leong Group units: City Developments (CDL); Hong Leong Holdings; and Trade and Industrial Development, a partnership between Hong Leong and Japan’s Mitsui Group.

Of the first batch of 50 units released, 38 have already been snapped up with about 60 per cent of the buyers from overseas, including Hong Kong, the United States and Europe. Those sold include five of the 14 penthouses, which are between 4,300 and 7,200 sq ft in size.

At least one of the penthouses went for ‘well over $16 million’, a CDL spokesman said without giving details. She said the estimated price range for St Regis units - comprising three- and four-bedroom apartments and penthouses - was $4 million to $19 million.

The target, said CDL group general manager Chia Ngiang Hong, is for an average selling price of $2,800 psf on the entire development though units are now priced at between $2,500 and $2,600 psf for the ‘early bird launch’. The project is expected to be completed in 2008, a year after the hotel it flanks, St Regis Singapore, opens.

Hong Leong Group executive chairman Kwek Leng Beng said he would have liked to launch sales for the condominium after the hotel was ready ’so that you can really see the gem, the jewel, before you buy and I can make more money’ by selling at a higher price per square foot.

The overwhelming interest in the project persuaded him otherwise, he added.

He also said the St Regis is about exclusivity and is not for all and sundry: ‘This is not open for everyone to rush in.’ That is why he opted for bigger but fewer units than was originally planned two years ago.

Given the relatively bad market then, the aim was to have 255 apartments, including two-bedroom ones, so ‘the lump sum of each unit will not be too much’, he said.

But for a brand like St Regis, ‘we shouldn’t have small units. You don’t talk about expensive, you talk about, ‘Is that a good investment?”

Getting sidetracked

SELLING the wonders of St Regis Residences was understandably top of the agenda for Hong Leong Group executive chairman Kwek Leng Beng yesterday but the property tycoon also displayed his savvy and wit during a lively session with the media in the morning. Here are some of the highlights:

ON BEING HIS OWN MAN

‘Look at the bet I had with a lot of people on Las Vegas Sands. I had the vision; I had the confidence that Sands will get it. I don?t mind so many analysts trying to say I am wrong but I will tell you the majority is always wrong and the minority, always right.’

ON BEING THE DUTIFUL HUSBAND

‘I just bought a unit at St Regis for my wife - put my money where my mouth is. She has been pestering me even before the project is built. No matter what the price is, she wants a sky villa or a penthouse. She has already signed the option but I have to foot the money. I must add she is a very savvy real estate investor; she has units in London, New York, Paris and so on, and so far, she has made money so I am not making noise.’

ON LEARNING FROM EXPERIENCE

‘I would like to advise all these en-bloc people: You learn the experience by luck and after so many years you multiply so many times of wealth. Today you get the money. What do you need to do? Put it in the bank and earn a low rate of interest? You should start to look into investment on real estate because that is your first experience. You are not experimenting because you have witnessed over the years what you have done and what you have done very successfully.’

ON DOING IT BETTER THAN OTHERS

‘Everyone can say ?I am developing a luxury apartment in district nine, 10 and 11?, but what does it mean? A brand is a body plus a soul. I can build a beautiful body but if it has no soul, that is not a brand. Don?t forget, there is one and only one St Regis in Singapore in a prime location. I?d rather be here - than in the busy part of Orchard Road - where I don?t want to be disturbed.’

Source : Straits Times - 2 Jun 2006

The exclusive factor in showflat parties has gone up by a few notches judging from some recent upscale property launches. JAIME EE looks at what goes on at these parties

WAYNE Bell cuts a dashing figure in his morning suit. It perfectly matches his impeccable manners, unflappable disposition and the genial timbre of his voice - the kind where he could say ‘you are all going to die now’ and still sound warmly reassuring.

The chief butler of St Regis Hotel in Houston looks like he stepped out of a Hollywood movie set, but he’s actually in Singapore right now as one of the main ‘attractions’ at one of Singapore’s most exclusive private parties which took place last night - the launch party of City Developments’ St Regis Residences. Together with two St Regis butlers from Shanghai, Mr Bell is part of the brand-awareness strategy to show first hand the kind of service that buyers of St Regis apartments can expect once they move in. And the initial conclusion seems to be: wow.

Forget the fireworks, Elvis retro nights or James Bond theme parties. Luxury property launches, which have always aimed at bringing the creme de la creme of society together in fancy champagne-and-chequebook shindigs, just went up another notch with this no-expense-spared bash with a guest list that mere mortals couldn’t even hope to come within sniffing distance of.

It’s another example of the high stakes involved in marketing high-end properties. The St Regis Residences’ showflat, for example, cost close to $6 million to create, and the result is a show-stopping replica of not just one, but two, four-bedroom condo layouts. Extravagantly furnished, guests could see for themselves how the place would look like upon moving in - and just for the party, the bedrooms were maintained by ‘chambermaids’ who looked like they’d just stepped out of a man’s fantasy.

Just 100 couples were invited to the St Regis party last night, where guests nibbled on Kobe beef, Balik Salmon and Alaskan king crab, and washed them down with Billecart Salmon Brut and Rose champagne. The guest list was so exclusive and so tightly controlled that even some bona fide St Regis buyers couldn’t score an invitation. Gerry de Silva, spokesman for the Hong Leong group, the parent of CDL, tells of a high net worth individual who decided to buy one of the smaller St Regis units, but was only offered an invitation to view the showflat, but not to the party. ‘By that time, all the invitations had gone out, and they couldn’t add any more guests,’ he explained.

Is this a sign of more luxurious parties for the well-heeled to look forward to as competition in the high-end condo market heats up?

While SC Global was the only one to tell BT that it relies on private sales rather than fancy launch parties - one of its last such parties was for Lincoln Modern almost five years ago - developers generally agree that it’s a challenge to keep coming up with novel ways of drumming up interest in their upscale properties.

Keppel Land, for one, deviated from the norm when it got local personality Ponz Goo to host a private party at its showflat for Ritz Residences.

Says Ms Goo, who heads local spa and beauty chain Haach: ‘Keppel wanted to do something different to launch its latest showflat, so they invited three different personalities to co-design the flat. The idea was to take into account our individual lifestyles and personalities, and translate it into the design of the showflat.’

Ms Goo is the first of the personalities to work with the designers to bring her own style to the showflat. The idea, says Albert Foo, Keppel Land’s deputy general manager for residential marketing, was to get away from the usual cookie-cutter design that showflats can have.

‘We decided to take it one step further and show people how one of their peers in the same social circle would do up their home. So it becomes a talking point. The first personality is Ponz Goo. And after which, we will redress it with the second personality - eye specialist Steve Seah - so each time, the show suite will take on a new look.’

In Ms Goo’s case, the yoga-lover converted one bedroom into an exercise studio, another into a reading-cum-music room and a third into a guest room. Her personal touches included Georg Jensen accessories, a Bose sound system and of course, Haach skin products.

Once that was done, Ms Goo hosted a private party at the showflat that was themed ‘A Night With Ponz’ where the 80 to 100 guests that showed up were high net worth individuals who were either her own friends or business associates, as well as members of the young entrepreneurs’ association.

As Mr Foo puts it, although the concept of showflat parties has been around for a while, ‘what is happening now is that they are becoming more sophisticated’. He likens it to selling luxury goods, ‘where purveyors try to personalise the sales approach and keep it exclusive’. He adds: ‘This end of the market doesn’t like the ‘crowd’ thing, so a direct and more personalised approach is necessary. It’s got to be very exclusive - our parties are strictly by invitation only. That way, those who are invited will feel very privileged, that the event is not just for any man in the street.’

Mr Foo hinted that the exclusive factor would be ramped up a few more notches once Keppel’s other luxury developments get off the ground. In fact, it’s one of the more creative developers where ideas are concerned. Another innovative property launch Keppel had was last year with its Park Infinia project in the Newton area.

Tjin Lee of events organiser Mercury Communications says: ‘Keppel wanted something more lifestyle-based, so we worked with famous local photographers like Wee Khim and Geoff Ang to donate their favourite photos to make up an exhibition with the theme ‘In My Home’.’

As the target market for that project was the younger fashion set, some 200 guests from the local fashion and lifestyle industries showed up for the food and glamour, and presumably, with chequebook in their Hermes bags.

Essentially, what all the parties are about is selling a lifestyle that many aspire too. And it’s about ’showcasing the project to prospective buyers, not necessarily a way to close deals’, says Miguel Ko, Starwood Hotels’ president for Asia-Pacific.

St Regis hotels comes under the Starwood umbrella, and one of the key selling factors of the St Regis Residences is that owners will enjoy the signature butler service made famous by the hotel chain which was first established in 1904 in New York.

As for last night’s fancy party, Mr Ko adds: ‘One of the brand differentiators of St Regis is to create memorable events. St Regis properties are known as the place to meet and celebrate in their respective markets - eg through weddings, high-end corporate meetings, product launches, etc. Having parties to launch residences fits in perfectly with the brand positioning. Thus it is common to have exclusive parties like they do in the US.’

Thus, the task for party organiser Olga Iserlis was to re-create the St Regis experience for the guests. ‘The minute you are greeted by the doormen and the butler, it’s all part of the life of St Regis,’ she says.

Besides target-specific launch parties, developers like Far East Organisation have been known to let their showflats be used as venues for product launch parties. Its showflat at SOHO Central facing the river, for one, was used for a fashion show and all-night party by retailer FJ Benjamin for its Raoul fashion line. Its fancy showflat for ICON at Tanjong Pagar, too, has been used as an exclusive party venue.

It’s about cross-marketing, says Mercury’s Ms Lee. ‘It’s a creative way in which SOHO managed to attract potential buyers that they may not have attracted before. You get a new audience by tapping a different database, in this case, that of FJ Benjamin’s.

‘In this way, FJB is happy because it doesn’t have to pay rent for the venue, and Far East gets a new audience from someone else’s database.’ And it was a huge one, as about 600 people spilled out of the two-level showflat facing Clarke Quay.

Concurs public relations veteran Monica Alsagoff, who runs her own company Communications Dna: ‘Property developers use us (event organisers) for exposure through our database.’ This is particularly so when a luxury product is being launched, for example. ‘They sponsor the venue and it’s a win-win situation because they get brand positioning and a chance to showcase to the right demographic. For the brand concerned, you’ve fulfilled the client’s needs in terms of unusual and exclusive venues. It’s like being the first to be invited to a club or a restaurant, or, in this case, a new property.’

But at the end of the day, do such parties or co-branding product launches help to clinch deals?

Yes, says Nicholas Mak, Knight Frank’s director of consultancy and research. But not necessarily because the guests are bowled over by the sheer excesses of it all.

‘At these parties, they usually give discounts to the guests to encourage them to make their bookings,’ he says. ‘All these parties are to draw them in and create the right atmosphere, but these rich people who are there are also hard-headed business people. At the end of the day, they still look at the price.’

Source : Business Times - 2 Jun 2006

St Regis Residences along Tanglin Road has set a new benchmark of $3,000 psf for property prices - 25 per cent higher than the previous record of $2,400 notched in the mid-1990s.

More than one transaction has been done at this price, said Kwek Leng Beng, City Developments Ltd (CDL) executive chairman, at the $6 million showflat opposite the St Regis site yesterday.

So far, CDL has launched 50 units of the 173-unit development and 38 have been sold at an ‘early bird special’ with an average price of $2,500-$2,600 psf. This works out to about $10 million for a 4,000 sq ft four-bedroom apartment. Prices will probably increase later to the ‘preferred average price of $2,800 psf’.

About 60 per cent of the buyers are foreigners.

Mr Kwek said that one investor from the Middle East even wanted to buy one of the two 23-storey residential towers.

The deal did not go through but CDL group general manager Chia Ngiang Hong said that the option was still open.

CDL also received offers to buy the 20-storey hotel tower but this, Mr Kwek said resolutely, ‘was not for sale’.

And perhaps with good reason. The development banks on the international appeal of the St Regis brand name, which is owned by Starwood Hotels and Resorts. Among other amenities, the St Regis Residences will be offered the hotel’s noted butler service.

In response to a query on the similarities with another ‘branded’ condominium, The Four Seasons Park, Starwood president (Asia-Pacific) Miguel Ko said that the two developments are not comparable.

Mr Ko, who himself lives at The Four Seasons Park, said that he was taken by the luxury brand association but pointed out that an underground link that was meant to connect the hotel to the residences never materialised. ‘You can’t send the butler across the street,’ he added.

The St Regis management offers a leasing service for owners who want rental returns. The details of this service have not been confirmed but it has led one property consultant to ask if CDL is ‘just selling hotel rooms’. Still, even if it is, this seems to be what the jet set wants. The same consultant conceded that St Regis Residences is a ‘unique product that justifies its asking price’.

Wallace Chu, Savills Singapore head of research, does not expect to see a buying frenzy, unlike the case at CDL’s The Sail @ Marina Bay. Not only is St Regis being sold ‘by appointment only’, he points out, ‘CDL will be targeting a specific market’.

Merrill Lynch analyst Sean Monaghan expects CDL to reap a huge profit from the St Regis project, but he still maintains a ‘neutral’ call on the stock.

He said that he is not too shocked by the asking prices either. ‘It was a shock 18 months ago with the Sail.’

Source : Business Times - 2 Jun 2006

But consultants say there should be a wider spectrum of residential sites

Property consultants and analysts expect the government to stick to the reserve list as the mainstay of its land sales programme for private residential, commercial and hotel sites for the second half of this year.

Under the reserve list system, sites are released only upon application by developers.

‘They’re likely to offer sites through the confirmed list only where they are needed for immediate development for some strategic purpose - as in the case of Marina Bay in the past,’ says Colliers International associate director (research and consultancy) Tay Huey Ying.

‘But at this point in time, the development of the area is progressing well with the award of the Business and Financial Centre (BFC) site and just last week, the Integrated Resort (IR) site. There doesn’t seem to be a pressing need for development sites to be placed in the confirmed list for now,’ she says.

Sites in the confirmed list are released for tender according to a pre-stated schedule regardless of demand from bidders. Under the reserve list, which was introduced in June 2001, the Ministry of National Development (MND) will launch a site for tender only if there is a successful application from a developer, accompanied by an undertaking to bid at a minimum price acceptable to the state.

The MND will end a 4 1/2-year hiatus on sales of confirmed list sites when it launches later this month the former Clifford Pier and next-door Customs Harbour Branch buildings. These are slated for adaptive use as a retail and lifestyle waterfront development and their inclusion in the confirmed list is to help complete the development of attractions around Marina Bay.

Looking ahead to the second-half government land sales programme, Knight Frank managing director Tan Tiong Cheng says: ‘The reserve list has worked well. It’s a market-driven approach where the government only sells sites if there’s demand from bidders. So why force the market to behave in a certain fashion by having a confirmed list?’

Similarly, DTZ Debenham Tie Leung director Tang Wei Leng says: ‘If at all the government offers anything on the confirmed list, it will be something that makes a meaningful difference to the Singapore landscape rather than something run of the mill.’

On the reserve list, however, property consultants had some suggestions on the type of sites that the government could offer.

For the residential sector, Mr Tan suggests the government should offer a broader spectrum of sites apart from the suburban sites for upgrader, mass-market housing where demand has been a bit sluggish. For a change, the government could offer some nice parcels in the prime districts and waterfront sites like in the Marina Bay location, given the strong demand for such homes.

Some market watchers note that rising land values for collective sales in the prime districts reflects strong demand from developers in this segment, so it could make sense for the government also to offer some 99-year sites in these locations. However, some property consultants, like CB Richard Ellis executive director (research and valuation) Li Hiaw Ho, takes a different view. ‘There’s enough supply from collective sales,’ he says.

As for the commercial sites, Ms Tay of Colliers suggests the government could offer office plots within the reserve list in regional locations like Woodlands, Jurong and Paya Lebar to cater to demand for backroom offices. ‘This will allow companies to decentralise their operations in the face of soaring office rents in the CBD,’ she says.

While there will be tightening supply of prime offices in the CBD until BFC’s first phase is completed around early 2010, it would not help for the MND to offer more office plots in this location for now. This is because any new projects can only be completed around the same time as the BFC, and bunch up supply in the area, Ms Tay says.

Most consultants also think there is scope for offering more hotel sites on the reserve list given the ambitious tourism targets. These could be in the Orchard and Marina locations, says Mr Li of CBRE.

He says: ‘Even with the IR having 2,500 hotel rooms, there will still be a shortage. Once the IR is completed it will be a major attraction and the area could do with more hotels.’

Source : Business Times - 2 Jun 2006

1. What is the meaning of selling en-bloc?

It means all the owners of separate units in an apartment, condominium or even an office building, collectively sell their properties.

2. How can an en-bloc sale be conducted?

Commonly either by way of private treaty or tender.

3. What are the legal documents in an en-bloc sale?

There are two mainly two legal documents – the Collective Sale Agreement and the Sale and Purchase Agreement.  However, if the property is sold by tender, then the latter would take the form of a Tender Document.

4. What are the main steps involved in an en-bloc sale process?

Phase 1:  Pre-Sale Preparation (1 months or more depending on the complexicity and number of owners involved in the Sale) – it includes the signing of the Collective Sale Agreement
Phase 2:  Public Tender Stage (1 month) – Development is up for Public Tender, and await developers to submit their bids
Phase 3:  Post Tender (1 month) – Evaluation of bids and negotiations with developers if necessary
Phase 4:  Legal Completion (3 months) – if there is less than 100% consensus, an application for an order to sell to the Strata Title Board is required.

5. On the average, how long does the en-bloc sale process take?

Generally, it takes about 9 to 12 months.

6. What are some of the principal terms in the Collective Sale Agreement?

Reserve price – the minimum price that owners agree to sell
Method of apportionment of  sale proceeds
The validity period of the Collective Sale Agreement
Date to deliver vacant possession, and how much is to be retained by the developer till vacant possession is delivered
The last day for all existing tenancies, -Owners are to inform their tenants with regards to the last day if the existing tenancies expiry dates are beyond the last day.
The Indemnities for the Sale Committee and between owners-The Sale Committee’s authority to sign plans for submission by the purchasers to the relevant authority.

7. What happens to the deposit paid for an en-bloc sale when only the majority owners have agreed to sell?

During this time, the developer purchase is on condition that an order to sell is given by the Strata Title Board. The deposit paid usually is held by the Vendor’s lawyer as stakeholder.

8. What is required by the Strata Titles Board to approve an en-bloc sale?

For developments that are less than 10 years old – the subsidiary proprietors with not less than 90% of share values must agree to sell
For developments of 10 years or less – the subsidiary proprietors with not less than 80% of share values must agree to sell
The “Age” is taken from date of issue of the latest Temporary Occupation Permit (TOP) or, if no TOP is issued, then the date of the latest Certificate of Statutory Completion is used.
The agreement to sell must be in writing under a Sale and Purchase Agreement, which specifies the proposed method of distribution of the sale proceeds
Not more than 3 persons must be appointed by the majority to act jointly as their authorised representatives
Majority need to give an undertaking to pay the costs of the Strata Titles Board
Majority need to consider the collective sale at an extraordinary meeting
Advertise the particulars of the application in four languages in the local newspaper
Send a copy of the proposed application to all subsidiary proprietors, mortgagors, CPF Board (if CPF fund are used for the purchased) and the placement of a copy under the main door of every unit
The application should include copies of the advertisement in the four languages, the Sale and Purchase Agreement, a statutory declaration by the purchase on his relationship, if any, to the subsidiary proprietors, minutes of the EGM, and valuation reports on each type of the apartment and method of distribution
Affix a copy of the notice in the 4 official languages to a conspicuous part of each building

9. What actually happens before the approval of an en-bloc sale?

The Strata Titles Board will make an order for sale if it is satisfied that:-

* the sale was done in good faith.
* the sale was conducted fairly, the Board will consider all the facts of the sale-such as the sale price, the distribution of the sale proceeds, and the relationship between the purchaser and any of the owners.

10. What are some examples of en-bloc sale not done in good faith?

An example is where owners of larger units agree on a certain method of apportionment which favours them and try to force the minority to agree to it.  Other questionable methods include collusion between the majority owners and the developer; and sellers being coerced into a joint venture with the developer.

11. Under what other circumstances would a collective sale would not be successful?

If the minority owners are likely to suffer a financial loss as a result of the sale going through, the Strata Titles Board may not allow the sale.

If the apportionment amount is not able to discharge the outstanding mortgage.

12.  What are the methods used to apportion the sale proceeds?

The Singapore Institute of Surveyors recommends the following methods:-

Share value Method: the apportionment for each unit is proportionate to its unit’s share value in relation to the total share value for the development.
An average of the strata floor area and the share value method – the apportionment is according to the unit’s strata floor area in relation to the total strata floor area.  The figures derived from the share value Method and floor area method are then averaged by taking 50% of each method.
General valuation – a value is estimated for each typical unit.  This valuation is on an individual market basis, ignoring collective sale potential, floor level, facing etc.. The valuation of each typical type of unit would vary according to the floor area of each unit on the basis that the larger the unit, the lower the value per square foot.  The apportionment for each unit would then be in proportion to that unit’s value in relation to the total value for the whole development.
The combination of general valuation and share value Method – a value is estimated for a typical unit of each type as in (c), and the total value is computed.  This total value is then deducted from the sale price, and the balance is distributed to each unit according to each unit’s share value as a proportion of the total share value for the development.

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : IEA