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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ST: SC Global offers NY-warehouse living at Martin Rd

SC Global offers NY-warehouse living at Martin Rd 

  

The warehouse flats will boast a more rugged design. — SC GLOBAL

 

SC GLOBAL is introducing New York-style warehouse living to Martin Road – a first for Singapore – with prices that will be set above the market average.

Like warehouse lofts in Lower Manhattan, the flats will feature high ceilings and seamless interior spaces that can be separated at will, using walls that slide and hide away.

 

And unlike traditional high-end developments here, Martin No. 38, as the project is called, will have a more rugged design of raw concrete, base metal finishes and unvarnished timbers.

 

Australian architect Kerry Hill is designing the project, which is on the site of a former warehouse near the Singapore River.

 

The freehold development, which will be launched later this year, will be 15 storeys high with 91 units, including four penthouses with pools.

 

Most of the units will be small – from 969 to 1,130 sq ft each – but there will be some larger ones of 1,335 to 1,495 sq ft each.

 

SC Global is aiming to sell the units at an average of $2,000 per sq ft (psf).

 

Prices of projects in the same area are around $1,200 to $1,850 psf, according to Knight Frank. Newer projects like 8 Rodyk cost more – a 721 sq ft apartment sold at $1,800 psf last month.

 

But market sentiment remains weak, with buyers staying away, especially from the high-end sector, which surged dramatically last year.

 

Prices have since slipped while activity has slowed considerably. But there is always room for the right product, said SC Global chairman and chief executive Simon Cheong, who is confident Martin No. 38 will be well-received.

 

SC Global bought the site in 1999 but said it deferred development until the area was rejuvenated and the concept of warehouse lofts became viable.

 

Source: Straits Times

Today: Simon says: Home prices have hit floor

Simon says: Home prices have hit floor

 

Head of property developer SC Global still bullish on the local real estate market

 

JUDGING from recent transactions, property prices appear to have hit or are near the floor, according to Mr Simon Cheong (picture), the president of the Real Estate Developers’ Association of Singapore (Redas).

 

As evidence, Mr Cheong, the head of high-end property developer SC Global, points to recent transactions of luxury apartments at Nassim Park and Goodwood Residences, which went for nearly $3,000 psf and $2,800 psf respectively.

 

“The high-end is the leading indicator. Why? Now you see the sophisticated investor coming in — people who spend $10 million, $20 million, $30 million (on a property) — these guys are no fools you know,” he says noting that during the 1997 financial crisis luxury flats like those at Ardmore Park were selling for just $1,000 psf.

 

Even mid-class units at developments like those at Dakota, Clover by the Park and Livia are enjoying brisk sales.

 

“Nett nett, property is still a great performer in the mid to long term. For example, the stock market index in 1998 was 800 and today it is 2900. Property appreciation is actually comparable, if not better, if one factors in rentals received,” Mr Cheong says.

 

The property market is driven very much by sentiment, and not just by the laws of supply and demand — the “feel good” factor, he says.

 

According to Mr Cheong developers’ prices have fallen by 30 per cent in all sectors of the market since their peak last year, but are still double those before the sub-prime problem kicked in last August.

 

“The current situation is timely, as since 2005 the property market has been climbing relentlessly for eight straight quarters according to URA (Urban Redevelopment Authority) figures. So, it’s time it took a breather.

 

“We developers were getting concerned that it was climbing so fast. So the sub-prime crisis, in a way hit at the right time and took some of the steam off the market. In a way it came as a relief to developers who were afraid that the steep climb in prices could tempt the authorities to take measures to curb speculation,” Mr Cheong told Today.

 

He also pointed out that it was not in the interest of developers to see prices going up too fast: “There is no reason why developers would like to see an exuberant market and see the bubble burst.”

 

But he claims that his positive outlook for the property market is also driven by fundamentals as interest rates are at present so low and the inflation rate so high it does not make sense to keep your money in the bank.

 

“What do I do if I have a lot of money in my bank account earning 0.6-per-cent interest while inflation is 6 per cent or more, and my money gets smaller and smaller by the day?” he asked.

 

One answer is to put your money in property as in the long run it is a better hedge against inflation than equities.

 

Furthermore, property rentals currently provide yields of 2 to 4 per cent, again better than putting your money in the bank.

 

And there is plenty of money around for when Standard Chartered Bank, earlier this month offered a promotional deposit rate of 2.28 per cent, it was so swamped that it had to withdraw the offer in just two days.

 

Mr Cheong expects interest rates to remain low over the next two years or so.

 

The supply of properties is also not as high as many people think. He pointed to a recent Citibank report which said that the bank sees no oversupply of homes over the next two years.

 

The report estimated that only 60 per cent of the 30,000 units forecast by the URA, will be completed during this period as by end March there were 6,000 en bloc flats that had yet to be demolished.

 

For en blocs to return, prices will have to be double what they are now, especially with no plot ratio increase in the recent announcement of the Singapore Master Plan by URA, Mr Cheong said.

 

High construction costs have also resulted in many projects being delayed. With the many building projects going on — both by the private (including the integrated resort projects) and public sectors — and high material costs caused by worldwide demand, constructions costs will remain for some years, Mr Cheong said.

 

He pointed out at the same time that construction costs here are currently higher than those of Dubai or Hong Kong.

 

“It takes three months to tear a building down but three years to put them up. Once you have taken it down, supply is taken off immediately but to put that supply back it will take three years,” he said.

 

Construction costs are now double what they were a year ago, with high end building costs between $600 and 800 psf and at the low end from $300 to $350 psf.

 

Sometimes Singaporeans also do not realise that market here being relatively small, it would take less than 1 per cent of the available global funds to see the market run up. So, it is not unreasonable to expect a strong turnaround when the sentiment improves, Mr Cheong said.:

 

He added that Singapore has also become a global city and price comparisons of property were now benchmarked against cities like London, Hong Kong, Shanghai and New York rather than against historical prices here.

 

“And contrary to market perception, funding is not an issue, There is no shortage of funding for end purchasers as evidenced by various bank packages (for mortgage loans),” he noted.

 

“My advice to potential buyers is that if you do not have high exposure to the property market, it is an opportune time to consider property”, he said.

 

Source: Today Newspaper

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