Apartment at The Sail hits $3,204 psf

High-end properties are revisiting the $3,000 psf price range. In the Marina Bay area, the 1,111-unit The Sail @ Marina Bay steals the spotlight once again with six transactions in the week of Jan 26 to Feb 5; four above $2,000 psf while two crossed the $3,000 psf level. While Sentosa Cove and Keppel Bay are abuzz over the opening of Resorts World at Sentosa, excitement is also mounting at Marina Bay as Las Vegas Sands announced last Wednesday it will open the first phase of its US$5.5 billion ($7.8 billion) Marina Bay Sands integrated resort with casino on April 27, and the second phase on June 23.

The two resale transactions at The Sail at above $3,000 psf were for two neighbouring units on the 58th floor of the 63-storey Tower 2. According to a Feb 1 caveat lodged with URA Realis, an 883 sq ft two-bedroom unit was sold for $2.69 million or $3,048 psf. The previous owner purchased the unit when Tower 2 was launched in late-2004 for a mere $961,830 ($1,090 psf), hence recognising capital gains of close to 180% in five years.

The other sale was for a 936 sq ft two-bedroom apartment that went for $3 million ($3,204 psf). The previous owner recognised capital gains of 200%, as he had purchased the unit at launch for $1,065 psf or $997,216.

Developed jointly by giant listed property developer City Developments Ltd and AIG Real Estate, Tower 2 was launched in October 2004 and completed in mid-2008, while the 70-storey Tower 1 was launched in 2005 and completed in 4Q2008.

The last time a unit at The Sail crossed the $3,000 psf level was when a 60th-floor, 1,033 sq ft unit in Tower 2 changed hands in a sub-sale for $3.5 million ($3,387 psf), according to an April 4, 2008 caveat. That is still the record in terms of psf price. The previous owner of the apartment, however, had purchased the unit in a sub-sale for $2,999 psf, according to an Aug 6, 2007 caveat, and only recognised some 13% in gains.

At the peak of the most recent property boom from August to October 2007, there were five sub-sales at $3,000 to $3,300 psf at The Sail. Perhaps we will see more transactions at such price levels in the coming months as the opening of the IR gets closer.

The other four transactions were at $2,080 to $2,600 psf (see table). According to a Feb 2 caveat, an 861 sq ft, Marina Bay-facing unit on the 39th floor of Tower 1 changed hands for over $2 million ($2,367 psf). The previous owner did a quick flip; according to an earlier caveat, the unit last changed hands in August at $2,100 psf. Hence, he recognised a gain of 12.7% in about six months. The first owner purchased the property in November 2005 at the launch for just over $1 million ($1,174 psf). His capital gain over a four-year period was close to 79%.

While The Sail is the most actively traded project at Marina Bay, Icon earns that title at Tanjong Pagar. Launched in 2003 just after the SARS outbreak, the 646-unit project by Far East Organization was completed in 2007. From end-January to early February, there were three resale transactions at Icon at $1,449 to $1,600 psf.

One was for a 915 sq ft unit on the 25th floor of the 46-storey building, which changed hands for $1.464 million ($1,600 psf), according to a Feb 1 caveat. The previous owner purchased the unit three years ago, according to a February 2007 caveat, for $896,000 ($979 psf), hence seeing a gain of 63.4%.

A 13th floor, 657 sq ft one-bedroom apartment went for $1,599 psf ($1.05 million). This is the third time the property has changed hands in the secondary market. The previous owner purchased the unit in February 2007 for a prosperous amount of $888,888 ($1,354 psf), hence recognising an 18% gain. However, the owner before that saw an 82% capital appreciation in just over a year as he had purchased it for just $488,000 ($743 psf), according to a December 2005 caveat. The very first owner purchased the unit at launch in 2003 for $454,600 ($692 psf).

With Far East Organization having started private previews of the 280-unit, 62-storey Altez right next door to Icon, interest has once again returned to the area. Since the private previews started on Feb 10, 140 out of 155 units released were sold at an average of $1,850 psf. Not surprisingly, asking prices at Icon have also increased in tandem.

In the Tanjong Pagar area, Allgreen Properties is expected to launch its project (Skysuite) next to Altez in 2Q, and market speculation is that Hong Leong Holdings will likely launch 76 Shenton Way, which will be redeveloped into a high-end condominium tower at prices in the $2,000 psf range.

Source : The Edge – 1 Mar 2010