The Sail is not for sale

nicely written article on the hype about The Sail

When the media is quoting various real estate analysts saying that real estate markets are up by 10% or so from the beginning of this year, buyers and agents, who are involved in The Sail resale market don’t even have time to stop and read such nonsense. They are too busy trying to get more units on the market as demand by far outstrips supply. As one agent told me, there are many buyers but never enough serious sellers. It also means that selling a unit there is just a matter of price and the deal can be done very fast – it’s almost like commodity dealing, and that makes the ownership in The Sail more exciting as there is lots of liquidity, compared to other real estate projects.

Just about three months ago some Marina Bay front view units were offered as low as 1,450-1,500psf. Some even sold at just above 1,000psf around the beginning of the year. Now some high floor choice units were sold at 2,550psf around early June, and the price is pushing higher by day. Don’t even try to calculate the percentage increase. it will leave you breathless.

While the mass media was reporting around late March – early April that real estate is in the doldrums, I was asked by my friend, a serious investor from Taiwan, to take him to look at what The Sail is about. After seeing just one unit with the full Marina View, he paused for a minute, then asked me why I didn’t push him much earlier to buy into such a postcard view. He and his fellow business partner from Cambodia, apparently one of the richest men there, both in the luxury and branded perfumes and cosmetics business, are avid real-estate investors, especially looking for choice units with spectacular views, be it a Hong Kong Harbour view or a Shanghai Pudong view.

In Singapore only the Marina Bay view can match such world class vistas and for now its only the Tower 1 in The Sail that got such units. My friend and his business partner, giving instructions over the phone, tried to buy some 6 units on the spot but most of their cheques were rejected at around just under 1,900psf.

In the lobby I met my acquaintance agent. She, like a few others, is specialising in nothing but The Sail. She told me that she is accompanying a small group of Indonesian buyers, who have a combined budget to buy 10-15 units and are hunting for mostly Marina Bay view units. She added that there is another group of Indonesian investors as well, searching for units with the total budget of $15mil, and looking for units only with full Bay view. That was only one weekend that I went there and saw it with my own eyes over just an hour or so on the site. There were barely a few choice units on the market and these were all snatched up in no time at around 1,850-1,950psf and now some of these are back on the market at 25-40% higher in a matter of months.

The Sail, with its 1,111 units is the biggest condo in Singapore and probably in the region. The project comprises 2 towers with some 30 different units configurations. The 70 story Tower 1 is facing the Marina Bay. The front facing units are only stacks 1 to 6. The stack 1’s (most northern side) view is not bad, but partially obstructed by the NTUC building so the choice units will be above the 40th floor. Stack 6 together with stack 1 are the bigger units. Both have got some back facing rooms and pillars. The best stack out of these 30 is a two-bedroom stack 4, right in the middle of the building, as it got a total net space without any pillars. Note that only some 10-15% of the total number of units in The Sail are actually facing the Marina Bay. The shorter Tower 2 is facing the ’pool view’, the upcoming MBFC and the One Raffles office building. Its not a bad investment at all and its stack 18 is the only one that has got a decent Marina Bay view, but the prime choice units will be in Tower 1, hence the stratospheric prices achieved.

The relatively few choice units with penthouses are owned by tycoons such as Dr. Modi, the Chairman of Spice Corp, Sam Goi the local popiah king and Thai Beverage tycoon billionaire Charoen Sirivadhanabhakdi.

The major selling point of The Sail is its, rare for Singapore, unobstructed views of Marina Bay and the surroundings. In most of the flatland Singapore there are basically no spectacular views. Therefore most of the people here are not aware of the major attraction and investment power that a spectacular view can deliver. Every taxi driver in HK knows that the higher you go on The Victoria Peak, the price is climbing higher and the units facing the harbor can command as much as 30-50% premium. But this concept is still relatively new for Singapore.

Mark my words, in 2-3 years the epicenter of life, fun and shopping will shift significantly to the Marina Bay and the surrounding area and the location will become a regional icon.
Source: http://www.property-report.com/singapore-property-magazine.php?con_id=885&date=072009

I can't gamble at IR this year

THOSE hoping to visit the Marina Bay integrated resort at the end of the year will be disappointed. The casino-resort will only be ready in January or February next year.

The announcement on the delayed opening came from none other than Mr Sheldon Adelson, chief executive officer and chairman of parent company Las Vegas Sands. He had announced that the entire project will be completed and open by 2009 on the day the company won the bid in 2007.

Three years on, at the topping out ceremony for its three hotel blocks on Wednesday morning, Mr Adelson told the media, government officials and guests that Marina Bay Sands will have its soft opening next January or February.

His reason: 'We can't control the flow of sand to make concrete, the availability of steel or the availability of labour.'

Marina Bay Sand's delayed opening will put it in direct competition with the other IR project on Sentosa, Resorts World on Sentosa, which is also targeting to open in the first quarter of next year. Both are gunning now to be ready before Chinese New Year, which falls in the mid-February, to welcome the festive crowds.

Still, Las Vegas Sands chief operation officer and president Michael Leven said he is not worried about going head to head with his competition as the Marina IR appeals to very different segments of the market.

He promised that 50 per cent of the resort will be ready for the soft opening, with the rest to follow two to three months later. The group remains confident that the Singapore project will be successful when it opens.

On Wednesday, the IR celebrated a major construction milestone - the completion of three 55-storey hotel towers. Work will start on the next challenge, which is to hoist the sky park onto the hotel towers, some 200 metres above the ground.

Wednesday's ceremony was attended by government officials from various agencies, ranging from Singapore Tourism Board, the Singapore Workforce Development Agency, the Casino Regulatory Authority, and some 120 regional and local media.

The Singapore integrated resort was one of the few projects Las Vegas Sands continued to work on after the company was hit by a massive cash crunch last year. It was forced to suspend work on a Macau project late last year and lay off 11,000 workers.

However, Mr Adelson said on Wednesday he expects work to commence on the stalled Macau project by end of the year. He said the company is looking at re-financing the project, and considering five options, including an initial public offering (IPO) on the Hong Kong market for the Macau assets to raise funds. Mr Adelson said the company expects to finalise plans for Macau by September.

Source: Straits Times, July 8, 2009

Analysis: Caribbean at Keppel Bay

I was thinking of a project to analyse. Scanning through the districts, analysing the masterplan and developments on the island, Caribbean and the Keppel area came up.

Project Info
Address: 4 - 46 KEPPEL BAY DRIVE
Type: APARTMENT / CONDO
District: 04
Year Completed: 2004
Tenure: 99 Years Leasehold wef 16 Aug 1999
Total Units: 969
Developer: KEPPEL BAY PTE LTD

Site plan

Floor plan

Specs

• Living room: Marble
• Bed room: Timber skirting
• Kitchen: Ceramic Tiles
• External wall: Spray textured coating finish and/or emulsion paint
  Audio/video intercom via webpad, Web camera, WAP enabled, WLAN, Proximity locking system, Safe, Kitchen cabinet, Wardrobe, Aircon
• Total Units: 969 in 22 blocks
• 2 Rooms (208 units): 78 to 86 sq.m. (840 to 926 sq.ft.)
• 2 Rooms +PES (28 units): 100 to 118 sq.m. (1076 to 1270 sq.ft.)
• 2 Rooms +PES+Study (19 units): 136 to 146 sq.m. (1464 to 1572 sq.ft.)
• 3 Rooms (302 units): 112 to 122 sq.m. (1206 to 1313 sq.ft.)
• 3 Rooms +Open Terrace (13 units): 116 to 126 sq.m. (1249 to 1356 sq.ft.)
• 3 Rooms +PES (43 units): 124 to 170 sq.m. (1335 to 1830 sq.ft.)
• 3 Rooms +Study (197 units): 123 to 157 sq.m. (1324 to 1690 sq.ft.)
• 3 Rooms +PES+Study (8 units): 141 to 212 sq.m. (1518 to 2282 sq.ft.)

My Analysis:

• waterfront living, with yacht berths. How many are there in SGP? Keppel Bay area and Sentosa only. Don't tell me about East Coast as they are NOT waterfront. Tanjong Rhu area comes close and its part of the Kallang Riverside initiative.
• Caribbean, Reflections and the 2 99LH plots owned by Keppel beside Caribbean and Keppel Island, including the Keppel club. Keppel has not launched plot 3,4 and 6 which should have 307, 234 and 94 units,while they will launch 382 units at Reflections but dont know when. These statistics are from http://www.kepcorp.com/kcl_eAR/2006/features/keppelbay.asp

• Do you think Keppel will screw themselves up and launch these new plots to disadvantage Caribbean and Reflections? Reflections already sold from range of 13xx to >2000 psf.
  
• nearest development to Sentosa IR that's outside Sentosa
  
• Only luxurious development till 2012 when Reflections TOP
  
• beside Vivo City
• near MRT
• huge project. Typically, huge projects are popular and maintenance fees are lower. Though 969 is a tad too large for me.
• good rental yield during recession. Q1 2009 rental data from URA shows that the 25th, Median and 75th Percentile are 4.98, 5.44, 6.03 respectively. On a conservative front, the 25th percentile was only lower than the top projects of THE PIER AT ROBERTSON and ICON.
• But I dont like this. Its 99 tenure starts from 1999!!

Ok, here's the most interesting part. Price trends... I use 2007 Q1 as reference as that's the last quarter where it's PPI of 136.5 is similar to 139.9 in 2009 Q1.

1. Latest transactions in 2009: from 900-1000 in Q1 and 1100-1300 in Q2!

1. Peak (all): 1757 for a 2077 sqft in June 2008
   
2. Low (all): 600 during launch
   
3. Median (all): 850-860
   
4. 2007 Q1 (all): 800-1300
   

1. 2/3 bedder peak: 1607
   
2. 2/3 bedder low: 600
   
3. 2/3 bedder median: 850
   
4. 2007 Q1 (2/3 bedder): 900-1100

1. 2 bedder peak: 1607
   
2. 2 bedder low: 750
   
3. 2 bedder median: 870
   
4. 2007 Q1 (2 bedder): 890-1100

Why 2/3 bedder? Because these are likely the most popular sizes.

Exciting, exciting, exciting!! Or is it?