BT: SC Global to launch Martin No38

SC Global to launch Martin No38

 

 

SC GLOBAL will launch Martin No 38 next month at an average price close to $2,000 per square foot.

 

 

 

Sleek beauty: Artist’s impression of the development, designed by award-winning architect Kerry Hill. It will launch at an average price close to $2,000 psf. 

 

 

The company said in a statement yesterday that the 91-unit development in Martin Road, near Mohammed Sultan Road and Clarke Quay, will mostly comprise one-plus-one bedroom and two-bedroom apartments ranging from 969-1,130 sq ft. There will be a limited number of larger two-plus-one and three-bedroom apartments, ranging from 1,335-1,485 sq ft.

 

Knight Frank director (research and consultancy) Nicholas Mak said the pricing appears a little ‘bullish’ but the developer may feel the project’s ‘design’ merits this.

 

A unit in nearby Robertson Blue sold recently for around $1,800 psf, he said.

 

And in March, it was reported that about 30 units at Martin Place Residences in Kim Yam Road sold for an average price of of about $1,800 psf after discounts.

 

SC Global is best known for developing high-end niche projects. And according to its chairman and chief executive officer Simon Cheong: ‘There is always room for the right product. Martin No 38, with the SC Global reputation for quality, will be unique and original. We are confident it will be well received.’

 

The development is designed by award-winning architect Kerry Hill. It is based on warehouse lofts in New York and London and features high ceilings and seamless interior spaces.

 

SC Global says: ‘An austere and beguiling industrial aestheticism pervades the details of this development, from the blackened tap fittings to the sheet-metal panels in the bathrooms, with their exposed bolt heads, unplastered interior concrete walls, exposed plywood edges of the cabinetry and acres of unvarnished timber.’

 

SC Global bought the site in 1999 but deferred development until the area had ‘rejuvenated itself and the context for this housing concept became ripe’.

 

SC Global projects under construction include The Marq on Paterson Hill and Hilltops at Cairnhill. The group has a landbank of more than 1.1 million sq ft of gross floor area in the Orchard Road and at Sentosa Cove.

 

Source: Business Times

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The bigger you are, the better you weather the storm

The bigger you are, the better you weather the storm

 

WHAT a difference a year makes.

 

Last year, euphoria ruled asset markets. After a moribund three years which saw Singapore property values dive by some 45 per cent, the market sprang to life in 2007, fuelled by the robust stock market and supported by a slew of new infrastructure initiatives – most notably the integrated resort (IR) development plans. Property prices surged some 28 per cent last year.

 

But all that is history now.

 

Latest data shows that prices for some property transactions in the sub-sale market have declined almost 40 per cent from last September’s levels. And although new home prices are still holding up amid only 2,100 new units launched to date, a potential glut of new supply next year could put pressure on new home prices.

 

Not surprisingly, property stocks have been hit.

 

And the turbulence facing the industry has sparked the inevitable rumours about who might be impacted most.

 

One company which is being closely watched is high-end property developer SC Global Developments.

 

With its properties priced at $4,000 per square foot per plot ratio (psf ppr) and above, speculation is rife that the company is caught between a rock and a hard place. Not surprisingly, SC Global’s stock price has dived into a seemingly inexorable decline, losing some two-thirds of its value since last October to close at $1.26 yesterday.

 

Weighing down sentiment on the stock is market talk that the company is struggling under a huge overhang of unsold apartment units and grappling with a huge debt burden.

 

Indeed, SC Global started the year with almost 1.1 million sq ft of unsold property – primarily at The Marq on Paterson, Hilltops, The Ardmore and The Beachfront Collection @ Sentosa. More critically, the company had debts of some $1.2 billion, almost double the $700 million it had a year earlier.

 

And its debt/equity ratio was almost three times.

 

Not exactly comforting numbers.

 

But looks can be deceiving. And SC Global is not just any developer.

 

The company, which has over $60 million in cash in its coffers, is a niche player catering to a high-end, globally mobile, jet-setting class which is relatively price-insensitive and discriminating.

 

Over the past half-year, the company has managed to sell some 200,000 sq ft of its land bank – mainly at The Marq @ Paterson and Hilltops – for over $700 million.

 

If SC Global exercises its option to prepay its debts from sale proceeds, the company would be left with a net debt of some $500 million against a remaining land bank of 900,000 sq ft. The resulting debt-land bank ratio of some $555 psf ppr is not exactly an insurmountable problem for a company like SC Global.

 

Seen from another angle, this could be a breakeven price of sorts for the company should it want to be completely debt-free (not that SC Global will ever sell any of its luxury units at such bargain basement prices, though).

 

In fact, the company has completely recouped its costs at The Marq with the sale of 40 per cent of the units there. So proceeds from every additional unit sold in the future will go straight to its bottom line.

 

But all this does not change the depressing macro picture for the property sector here, where there is still significant downside risk to valuations.

 

Still, as Merrill Lynch noted recently, SC Global has only two property assets that are at risk of impairment in the current downcycle: the Sentosa Beachfront Collection and The Ardmore. But the investment house noted that the average book value of these assets would have to dive by two-thirds, from $2,141 psf ppr to $824 psf ppr, ‘to be of any real threat to SC Global’s survival’ – an outcome which is highly unlikely.

 

Recent evidence suggests that despite the current slowdown, the luxury segment seems to have held up pretty well, with some 50 new apartments in the over $10 million price range being snapped up this year. This number could double by year-end.

 

Meanwhile, Fitch Ratings believes that residential receivable transactions have not been impacted by the softening of the local residential market. Fitch – which applies market value decline (MVD) assumptions of between 48 per cent and 58 per cent to the transactions depending on the property location – dismisses the possibility that the current stress scenario will develop into anything similar to that which existed during the Asian financial crisis.

 

The bottom line? Not all property players are equal. Some, like SC Global, have a premium land bank, cater to a niche market, and have the ability to sit on their land bank for a while. These players will ride out the current turbulence better than others.

                                   

Source: Business Times