International Business & Economy Banker Wee Cho Yaw buys up all 45 unsold luxury condos at...

Banker Wee Cho Yaw buys up all 45 unsold luxury condos at The Nassim

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One of the richest man in Singapore, banker Wee Cho Yaw, is reported to have bought all 45 unsold units at The Nassim, a luxury condominium development in District 10.

The development consists of 55 freehold units in total.

Mr Wee, 89, is the Emeritus Chairman of United Overseas Bank (UOB), and was ranked number 7 on Forbes magazine’s list of the richest Singaporeans in 2016 with a nett worth of US$5billion.

According to local media reports, the 45 units came with a price tag of S$411.6 million.

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The property itself is valued at some S$407.2 million, or S$2,300 per sq ft.

The developer, Capitaland, said the price represents a discount of 18 per cent on the current unit sale price.

The Straits Times reports that the 45 units make up a strata area of 16,446 sq m.

The other 10 units were bought by individuals such as, it is believed, Mr Sigid Wonowidjojo, whose family controls Indonesian cigarette maker, Gudang Garam.

“The deal is the latest in a series of recent bulk sales of residential units which developers have done to avoid the Qualifying Certificate (QC) penalties,” the Straits Times says.

Under Singapore’s property laws, developers who are issued with a QC must finish building the project within five years of acquiring the site, and they must also sell all units within two years of obtaining a temporary occupation permit (TOP).

With Singapore’s private property sector in lukewarm state, due partly to the government’s cooling measures, sales have been tepid. Analysts said last year that while this may be so, it does not mean developers would slash prices to move the units. Instead, they may pursue other options such as bulk sales.

Capitaland estimated that it would have to pay S$9.3 million in QC penalties in the first year (by August 2016), and a whopping S$27.9 million in the third year, if it was unable to sell off the units.

Credit Suisse had estimated in March last year that the combined QC which developers would have to pay in 2016 and 2017 would be S$226 million and S$1.3 billion respectively.

However, other analysts say the figure is likely to be lower as developers sell more units.


Footnote:

Under the Residential Property Act’s Qualifying Certificate (QC) rules, all developers with non-Singaporean shareholders or directors are required to obtain the Temporary Occupation Permit (TOP) for their housing developments within 5 years and to sell all dwelling units within two years from the date of TOP.

To extend the deadline, developers will have to fork out an additional 8 per cent, 16 per cent and 24 per cent of the land purchase price for the first, second and subsequent years respectively. The amount is pro-rated accordingly to the proportion of unsold units. Should developers fail to comply with the QC rules, their banker’s guarantee of 10 per cent of the land purchase price that they put up will be forfeited.

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