SENTOSA COVE was like Treasure Island for developer Ho Bee, which surfed on the wave of demand for high-end property at the enclave to make a mint. Then the tide went out.

The financial crisis and the crash in prime real estate suddenly gave the exclusive seafront estate a forlorn air and Ho Bee the look of a firm that had overplayed its hand.

The developer dismissed such concerns back then and it continues to maintain that the enclave will be a winner.

Ho Bee got in early on Sentosa Island, bought aggressively and made piles of money selling the developed units.

But when the downturn hit, that close association with Sentosa meant it quickly fell out of favour with investors.

Ho Bee shares dived to a 52-week low of 27.5 cents each at one point in March last year, but shares have since climbed as high as $1.90 in January.

There seemed cause for concern. Ho Bee, with IOI Properties, bought The Pinnacle Collection, the last condo plot on Sentosa Cove for $1.097 billion or a whopping price of $1,822 per sq ft (psf) of potential gross floor area just before the crisis set in.

Ho Bee chairman and chief executive Chua Thian Poh told The Straits Times he remained confident of the prospects of Sentosa Cove properties throughout the crisis because they are scarce.

But the market and analysts did not share that view. By early last year, Sentosa Cove values had plunged and there was talk of defaults. An agent reportedly said the enclave had lost its appeal.

Data from Colliers International then showed that some non-landed Sentosa Cove properties were sold at an average of $1,318 psf, or 46 per cent below the average of $2,431 psf at the peak in early 2008.

There were also fears of deferred payment scheme (DPS) defaults. Ho Bee completed four projects last year – The Coast, Vertis, Quinterra, Orange Grove Residences – that exposed it to risks from DPS defaults.

‘At the beginning of last year, many people were looking at whether those who bought under the deferred payment scheme could fulfil their obligations to complete their purchases,’ said Mr Chua.

‘Our board was very cautious. We went through a lot of simulations on what was the worst scenario.

‘We talked about a 10 per cent default, 20 per cent default on DPS and even up to 50 per cent default. But we were still very comfortable with it.’

Concerns lingered for a while as consumers had trouble getting financing at one point, said Mr Chua. But the situation turned the corner sooner than expected and DPS concerns evaporated.

Ho Bee said it has had just one default for The Coast in Sentosa Cove and one for Orange Grove Residences.

‘We hope to have more people default so we can then take (the property) back and resell it straightaway at a higher price,’ said Mr Chua with a laugh.

‘Most developers should be quite comfortable during the last six to eight months of 2009.’

While the financial crisis has not flattened Ho Bee as some have feared, it has given it an opportunity to reflect.

‘You focus on… your next step. You have time to think,’ said Mr Chua.

Ho Bee started to explore overseas opportunities at the start of last year, a strategy it used before. It moved to London during the 1996 property peak here to avoid a property bubble that it was convinced would burst.

The bubble did burst and Ho Bee found that its British move was a godsend: Its main income until 2000 came from London.

Things are not that desperate now. Prices have risen. Take Ho Bee’s The Coast condo: Sub-sale deals went for as low as $1,195 psf early last year but has since bounced back to above $2,000 psf, though deals are few.

Its gamble on Sentosa Cove has paid off, although the market has changed much in the past five years, making life harder for developers.

‘Previously, when you bid for land, your margin may be low, but you still have a margin,’ said Mr Chua.

But developers are now bidding for land at forward prices, he said.

‘You look at the Singapore market. Almost every project is an ad hoc project as you can’t have a big land bank.’

Ho Bee had the first mover advantage in Sentosa Cove, ‘but when you build up the market, you have to compete with other developers for the land in Sentosa.

‘Now, you are getting more and more competition in the bidding of land… less margins and more competition… so our next push will be to venture overseas,’ said Mr Chua.

Over the next one to two years, Ho Bee hopes to deploy 30 to 40 per cent of its capital overseas, focusing on residential and mixed development projects.

China is under intense scrutiny. The company is in the midst of a study on jointly developing a residential project in Tangshan Nanhu Eco-City with Yanlord Land Group. It also just acquired a residential development site in Shanghai with the same partner.

‘In China, you can have a big land bank. Land cost is only about 20 per cent to 30 per cent of project cost,’ said Mr Chua. ‘In Singapore, it is about 50 per cent to 70 per cent, so you can’t afford a big land bank here.

‘Hopefully, China will become our Sentosa Cove in two to three years.’

Source: Straits Times, 20 Feb 2010

SINGAPORE’s first casino will open on Sunday at 12.18pm, together with a partial opening of Universal Studios.

A day of festivities at the Integrated Resort has been planned to mark the red-letter day, including the debut of its public attraction, Lake of Dreams, and evening previews at its Universal Studios theme park.

The casino opening is part of the initial phased opening of Singapore’s first IR that began on 20 Jan 2010 with the opening of its four hotels: Crockfords Tower; Hotel Michael; Festive Hotel; and Hard Rock Hotel Singapore. Its shopping and dining promenade, FestiveWalk, soft-opened on 30 Jan.

Resorts World Sentosa chairman, Tan Sri Lim Kok Thay said: ‘In less than three years since the time we broke ground and commenced construction for Resorts World Sentosa, we have taken our vision from drawing board to reality. This is a significant milestone in Singapore’s business history. We promised to deliver a true Integrated Resort, and we have not deviated from that.’

For sneak peek week, Universal Studios Singapore will open from 5pm to 9pm every night from 14 Feb to 21 Feb.

Admission will be by $10 tickets, rebated by a same-value dining voucher. Sale of the tickets starts from 11.18am on Friday, 12 Feb 2010. Guests can visit the box office at the Universal Studios Singapore front gate to purchase tickets for another day (there will be no same day ticket sales available).

Source: Straits Times, 11 Feb 2010

Resorts World at Sentosa has been awarded its casino licence. It is the first of Singapore’s two integrated resorts to get the go ahead for its casino operations.

Although the opening date of the casino at Resort World has not been announced, preparations are in full swing.

Resorts World Sentosa chairman Lim Kok Thay said: “We are very happy to have received the casino licence. This was made possible by the dedicated team, consultants, contractors and government officials, especially the Casino Regulatory Authority, which worked tirelessly to set up the regulatory framework within a very agressive timeline.”

Lunar New Year decorations have already been put up at the lobby of the casino.

Resorts World staff were in the midst of an orientation when the MediaCorp news team visited.

Although the doors remain shut, visitors are excited about the prospect the casino may be opening soon.

Some are hoping the casino will be open in time for the Lunar New Year which begins on February 14.

While foreigners do not have to pay the US$100 levy before entering the casino, locals will have to do so at this booth.

Before arriving at the booth, visitors to the casino will be segregated according to whether they are Singaporeans or overseas guests.

The S$6.6 billion integrated resort at Sentosa is opening in phases, starting with its hotels last month.

Many are also waiting for the theme park, Universal Studios Singapore to open.

Some of the staff at the resort have been busy testing out the amusement rides and more.

Andrea Teo, vice president, Entertainment, Resorts World Sentosa, said: “We are in full swing, getting ready for the theme park. We have been testing and commissioning the rides. Some of our people have been experiencing this – going from ride to ride to ride and having a very good time. And we have all been eating at restaurants, trying out the food at very good prices.

“We are at various percentages of finishing the different rides and resorts. But I would say that we are on an actually pretty fast track to completely everything. Our hotel opened on the January 20 and since then, we’ve had 90 per cent occupancy. Festive Hotel and Hard Rock have been fully booked. And for Chinese New Year, we are fully booked.”

And while casino staff are busy gearing up for the opening day, Singapore’s Police have also been started serving the Exclusion Orders to those with a history of crimes such as those related to drugs and illegal moneylending.

So far, about 3,500 people with serious criminal records have been barred from the two casinos when they open.

The latest exclusion orders are on top of what the National Council on Problem Gambling has issued.

Some 28,000 undischarged bankrupts and those on public assistance have also been banned from entering casinos.

Source: Channel News Asia, 6 Feb 2010

SOUTH-EAST Asia’s first big-name theme park – Universal Studios Singapore – at Resorts World Sentosa (RWS) looks set to open its doors next week, just a week after the resort welcomes visitors to its hotels and shops today.

Tan Sri Lim Kok Thay, chairman of Genting Group, which owns the $6.59 billion resort, said yesterday: ‘By the end of next week, Universal Studios Singapore will open, and when we officially launch Resorts World Sentosa later this year, it will be another significant and historical milestone achievement for the group.’

He was speaking at the Kuala Lumpur launch of the group’s logo to mark its 45th anniversary.

RWS had previously not been able to confirm the opening date of the theme park, saying only that it would be open by the first quarter. But sources pointed to an opening date of Jan 28 or 29.

When asked about its main attraction yesterday, a RWS spokesman would only say that it was working closely with the Ministry of Home Affairs to get the relevant permits.

The theme park boasts 24 rides and attractions, 20 of which are expected to be ready when it opens, according to a prior announcement. Each ride requires a permit to operate, and a RWS spokesman said they will not be opened to the public until proven to be safe.

The resort is also awaiting a licence to operate its casino.

The casino and theme park are expected to be the sprawling 49ha complex’s main money-spinners, but it boasts other attractions too, including the world’s largest oceanarium, plus dozens of shops and restaurants.

As part of its concept plan, a significant portion of the resort has to also cater to non-gaming areas, with the government setting a maximum approved gaming area of no more than 5 per cent of the resort’s total development area.

The theme park is expected to attract up to 30,000 visitors daily.

A one-day weekday pass will cost $66 for adults, $48 for children and $32 for senior citizens. Weekend, public holiday and eve of public holiday one-day passes will cost $72, $52 and $36 respectively.

But the passes are still cheaper than those of Universal’s other attractions in Orlando and Osaka, which go for US$79 (S$109) and 5,800 yen (S$90) respectively.

Source: Straits Times, 20 Jan 2010

Visitors to Resorts World Sentosa will be able to shop there when the first of its retail belt opens in time, for its soft launch on Wednesday.

The shopping strip makes up about 20 per cent of the entire retail space at the integrated resort.

As for its casino and the Universal Studio theme park, the company is hoping to open both in time for the Lunar New Year.

Last minute touches are being made to greet guests when Singapore’s first integrated resort opens. With just four of its six hotels and 10 restaurants opened, there is already strong interest from both locals and tourists.

Andrew Hickey, vice president (Rooms), Resorts World Sentosa said: “We had over 5,000 room nights booked in the first days of our reservations centre opening. (There is a) strong local demand from the overseas travel trade.

“Chinese New Year is already booked out. Indicators are very very strong. Weekends are filling up obviously”.

Resorts World has said it is targeting 12 to 13 million visitors each year, boosting Singapore’s visitor arrival numbers.

The Singapore Tourism Board has said that it hopes the two Integrated Resorts, including the one at Marina Bay Sands, will help double visitorship figures to 17 million by 2015.

Also making its grand opening on Wednesday is the Galleria – where retail staff have been put through the paces. This retail belt links the Festive Hotel, the casino entrance and Hotel Michael.

Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa said: “We also have a Swarovski, we have a beauty hall and we have a Swiss shop gallery. We have some very nice new to market brands like Canali, which will open its first retail shop in Singapore as well as a very famous brand from Canada called Damiani, which is a very high-end jewellery shop.”

“Apart from these high-end jewellery (shops), we also have our very famous Chihuly gallery. This is going to be very exciting. We have about S$6 million worth of his very beautiful art works and his chandeliers in the casino as well as the Crockfords Tower, and now guests will be able to go and buy smaller pieces which are absolutely fabulous or some of his wonderful paintings.

“We have also got a Michael Graves gallery – first in the world in fact – and Michael Graves is the one who designed this entire project. He will have his own gallery selling stuff that he designed himself like the whistling teapot.”

The completed retail stretch at Resorts World Sentosa is about 300 metres long, with over 20 high-end brands including the highly anticipated Victoria’s Secret boutique.

Mr Hawkes said: “A lot of the retail here is geared towards our casino customers, (and) impulse buying.

“So that is why we have targeted some of the products. There are very high-end retail, expensive watches, diamonds, jewellery.”

About 70 per cent of the resort’s entire retail space is expected to be ready by next month.

“Especially if you take into consideration our Universal Studios, which is huge. We have got about 16 shops over there and we have something for absolutely everybody within our retail offerings in Universal Studios,” added Mr Hawkes.

But the clincher for most people would be the opening of the theme park and casino.

Ron Lim, general manager, Crossroad Tours & Travel said: “I already got a group of 12 persons coming from Taiwan into Resorts World. From what we see, it is supposed to be good.

“Furthermore, Casino is tied up with a theme park so when the adults play at the casino they will still go to the theme park”.

Wendy Leong, general manager, City Tours said: “The main concern right now is when Universal Studio is going to be opened, so that we will be able to package it together including all the hotel stay as well.”

Resorts World is currently awaiting licensing approvals from authorities for both the casino and theme park. And when Universal Studios opens, 20 out of its 24 rides will be fully operational.

Over the next two years, visitors can expect phase two of Resorts World Sentosa to be completed. These include two more hotels and the marine life park, the world’s largest oceanarium.

Source: Channel News Asia, 18 Jan 2010

Exclusivity factor and island’s growing vibrancy expected to attract foreigners

When it is fully developed in 2014, Sentosa Cove will have just over 2,100 homes.

Inspired by Port Grimaud in France, the area offers residents a style of living that is sharply different from what they can find on mainland Singapore. Residents in this gated waterfront enclave enjoy a resort lifestyle next to the sea, complete with private berth facilities.

The area – which has been just one big amorphous construction site in the past two years – is slowly taking shape. Access has been enhanced with improved road infrastructure, and Resorts World Sentosa is nearing completion, with the partial opening of four hotels on Wednesday.

Other parts of Sentosa have been or are being upgraded. As the jigsaw pieces fall in place and a far more vibrant Sentosa emerges, more buyers – especially foreigners – will be drawn to housing there.

In 2004, when Sentosa Cove’s first project, The Berth by the Cove, was launched, only 26 per cent of the units were taken up by non-Singaporeans – that is, permanent residents (PRs), foreigners and companies.

The proportion of foreign buyers has increased since then. Last year, non-Singapore citizens accounted for around half of the transactions at Sentosa Cove.

In contrast, non-Singaporeans made up only 38 per cent of the buyers of waterfront housing in Districts 1 and 4, which cover Marina Bay, the HarbourFront and Telok Blangah.

When Seven Palms at Sentosa Cove was launched in October last year, four of the six units in the condominium were bought by foreigners: three from Hong Kong; the other from the Philippines.

Similarly, three of the six units sold during last month’s preview of Kasara were taken by non-Singaporeans.

In the past two years, the top foreign and PR buyers at Sentosa Cove have hailed from Indonesia, Malaysia, Britain and China – mirroring those who bought homes in Districts 9, 10 and 11.

However, the proportion of Indonesian buyers at Sentosa Cove dropped during this period. They made up less than a fifth of the home sales at Sentosa Cove, but accounted for more than a third of the private home transactions in the prime districts.

Malaysians also accounted for fewer home sales at Sentosa Cove – 16 per cent, against 22 per cent in the prime districts.

In contrast, British and mainland Chinese buyers took up more homes in Sentosa Cove than they did in the prime districts.

The British accounted for 14 per cent of home sales at Sentosa Cove, compared with just 6 per cent in the prime districts.

Similarly, mainland Chinese bought 12 per cent of homes in Sentosa Cove, but just 7 per cent of homes in the prime districts.

During the boom period in 2007, Sentosa Cove homes did as well as other waterfront homes in mainland Singapore, and homes in Districts 9, 10 and 11. Prices in these segments outstripped those for the rest of the market.

Landed homes in Sentosa Cove cost only slightly less than the much-coveted good class bungalows (GCBs), although they have smaller land areas and 99-year leasehold tenures.

For detached houses in Sentosa Cove, the land area typically ranges from 650 sq m to 950 sq m, or about 7,000 sq ft to 10,225 sq ft. Price-wise, they cost $11 million to $16 million in the second half of last year.

As a comparison, a freehold GCB with a land area of 1,400 sq m to 2,000 sq m costs $12 million to $19 million.

Detached houses in Sentosa Cove are now fetching far higher prices than they did during the 2007 property boom. Buyers who bought these homes then and sold them last year have made a profit of 25 per cent on average.

In contrast, freehold detached homes in prime districts enjoyed an 18 per cent rise in price between 2008 and last year.

When fully developed, Sentosa Cove will have only around 400 landed homes, whereas there are about 2,500 GCBs on the mainland. The limited supply of Sentosa homes could explain why they are so desirable.

Furthermore, Sentosa Cove is the only place in Singapore where foreigners are allowed to own landed homes without first becoming PRs.

Singapore has always been viewed as a safe haven for investment because of its political stability, well-regulated property market and transparent policies.

With the integrated resorts at Marina Bay and Sentosa due to open soon, investors are likely to turn more confident about Singapore’s private property market.

Well-heeled foreign investors are increasingly turning their attention to the high-end segment of the property market here, which has historically shown greater upside potential during periods of economic expansion.

This group of investors has a preference for trophy investments that offer unique attributes. Hence, Sentosa Cove homes are likely to attract heavy interest as economic prospects brighten.

The writer is head of South-east Asia research at DTZ Debenham Tie Leung.


Source : Sunday Times – 17 Jan 2010

FIVE years in the making and now, the first integrated resort (IR), Resorts World Sentosa (RWS), will begin to open next week.

And to say that Singapore has a lot riding on this would be an understatement.

When the IRs were first given the green light back in 2005, job creation and a boost to the economy had been emphasised as key reasons to accord prominent and valuable development sites to what would essentially be a theme park and an exhibition hall with casinos. About 40,000 jobs were expected to be created indirectly by 2015, on top of the 10,000 jobs created at each IR. Within this period, Singapore’s gross domestic product (GDP) was also projected to grow on the back of about $2.7 billion of value-add generated by the IR effect.

Today, apart from a few detractors, all signs seem to point towards the IR effect really working. Already, the construction and real estate sectors have benefited. Leong Wai Ho, an economist at Barclays Capital Research estimated that both IRs at maximum capacity could potentially add up to 1.7 percentage points to GDP in a given year, higher than the government’s most recent estimate of 0.5 to one per cent.

One reason for Mr Leong’s bullishness is that Singapore, which has historically never been a single-stop destination for tourists, could now change its profile. ‘The broader mix of activities could also induce each visitor to stay longer and spend more,’ he added. ‘Outside of construction, there is a wide range of beneficiaries – from food manufacturers, general suppliers, wholesalers, retailers, Mice (meetings, incentives, conventions and exhibitions), entertainment venues, even banks and our capital markets,’ added Mr Leong.

There are challenges ahead though, and for Resorts World, this may come in the form of the neighbouring competition.

Jonathan Galaviz, an independent travel and leisure sector strategist, believed that it is reasonable to expect that by 2020, there will be several more cities in Asia that will offer integrated casino entertainment. ‘I think most cities in Asia would see a theme park being strategically beneficial to their tourism mix, but stand-alone theme parks generally have very low returns on capital, so investors are usually wary. It’s important for Singapore to begin looking at the next ‘wow factor’ that it must develop to be competitive in 2015 and beyond in Asia’s tourism sector,’ he said.

RWS is expected to roll out new attractions at Universal Studios Singapore (USS) regularly. Phase Two, which includes the world’s largest aquarium, will open next year.

But will it be enough to generate buzz?

‘Theme parks are successes or failures based upon the ability to get repeat visitation over a long multi-year period. There will be a lot of first time visitation in the first year of operation, but keeping the theme park exciting after five years of operation to attract repeat visitors is the key to financial success,’ added Mr Galaviz.

In terms of business viability, much will depend on the revenues generated by the casino. In this respect, Genting Singapore – RWS’s owner – may be in a relatively good position to weather a longer ramping-up period as parent Genting Berhad is flushed with cash.

Melvyn Boey, economist at Bank of America Merrill Lynch, added: ‘Debt covenants won’t be a major issue.’

Still, there are three gaming destinations nearby – Macau, Malaysia and Australia – and all would be loath to give up any share in the gaming pie, including Genting, which also owns the casinos in Malaysia.

Dean Macomber, a gaming consultant and president of Macomber International reckoned that the casinos ‘will do phenomenally well’. But with investment capital being so high – US$4.4 billion for RWS – Mr Macomber said: ‘This makes any source of revenue more critical but particularly so if a large category of revenue is placed in jeopardy of being lost, such as junket players and/or Singapore residents.’

Already, the current financial crisis is expected to have impacted bullish financial projections made earlier when the IR bids were first awarded in 2006.

Can the casinos survive without junkets? ‘What we do know is that Asian junket-driven demand is real and is large. All the metrics would indicate that the resident market is real and large,’ said Mr Macomber.

As the junket regulations were only released recently, it is likely that the IR operators would not have factored in the possibility of low junket support. ‘This means they must do the best they can with what they have, while, if necessary, find alternative sources of revenue/profit,’ added Mr Macomber.

RWS already seems to be on it.

All resorts have Mice facilities but those at RWS are proving to be quite substantial, boasting one of South-east Asia’s largest, column-free ballrooms, 26 function rooms and over 20 indoor and outdoor events venues for more than 35,000 delegates at any one time.

Marina Bay Sands (MBS) has said that it can host 45,000 delegates.

Trevor Soh, director of events organiser Pico Art, said that it is looking to stage events at both IRs. ‘Both MBS and RWS have different exciting offerings and attractions serving the needs and requirements of different events, organisers and participants. To event organisers, flexibility and service levels are very important selection criteria besides price, location and facilities,’ said Mr Soh.

Genting is not so well known as a Mice player but it apparently has a finger in this pie too. ‘Genting has a successful track record in operating leisure resorts with Mice facilities in the region. RWS will be able to leverage on the group’s experience and business network in the region,’ said Mr Soh.

Source: Business Times, 16 Jan 2010

THIN, grey-haired and soft-spoken, Mr Ralf Gresch, 44, manager at the Festive Hotel, makes an unlikely Pied Piper as he leads a boisterous brood of children through the plush hotel lobby.

‘You need to find Donkey,’ he says, waving a toy replica of the lovable cartoon character from the Hollywood animated blockbuster Shrek.

Instantly, half a dozen children forage under sofas and peek behind curtains in search of their grey, grinning friend.

‘Hey, I found one,’ shrieks a bespectacled 10- year-old. ‘Me too, me too,’ shout others.

The children were having a great time at the soft launch of Resorts World Sentosa’s (RWS) hotels last weekend, experiencing the hospitality on offer at Festive Hotel, one of the three hotels providing very different guest experiences.

For them and their parents – friends and family of RWS employees – the mood was one of childish high jinks and good cheer as they made the most of their free run of a brand new hotel.

The atmosphere at the Hard Rock Hotel next door was a tad more grown-up, with guests getting a glimpse into the lives of famous rock stars. Bruce Springsteen blared from the speakers and rooms were adorned with haunting black-and-white photographs of rock stars through the ages.

In contrast, elegance and sophistication ruled at Hotel Michael, with art aficionados marvelling at the angular designs of famed American architect Michael Graves, the designer of everything at the hotel – including the restaurant’s cutlery.

All three themed hotels – plus the elite invitation-only Crockfords Tower facility – will officially open their doors to the public on Wednesday. And a further two hotels are planned – Equarius and Spa Villas – to open at a later unspecified date.

When all are up and running, the resort will have a total of 1,800 rooms. Mr Roger Lienhard, vice-president of food and beverage and rooms at RWS, says visitors will be spoilt for choice.

‘Each one offers a vastly different experience in terms of design and ambience,’ he says.

Whatever style of accommodation is selected by visitors, they should be sure to enjoy a high level of service from staff. The Festive Hotel’s Mr Gresch insists that wherever staff are they will be ‘friendly, humble and always at your service’.

Their attention is focused on detail. For instance, a key task of every staff member at his hotel is to ensure children are given special treatment.

Over at Hard Rock, pleasing customers is also high on the agenda.The hotel’s manager, Mr Peter Wong, 50, who could pass muster as a rock star himself given his turquoise-streaked hair, has a whiteboard listing the service ‘challenges of the day’.

Last weekend, staff were grappling with a unique problem – how to quickly transport birthday cakes from the resort’s central kitchen at Hard Rock to Hotel Michael nearly a kilometre away.

‘We soon realised birthday amenities needed to be stocked at each individual hotel,’ said Mr Wong. ‘All it required was buying a few extra fridges.’

The smooth service and myriad comforts that the range of hotels promises do not come cheap.

Room rates inclusive of breakfast at the Festive Hotel start at $400 a night, at Hard Rock they come in at $450, while at Hotel Michael the base price is $500.

Given that even the luxurious Bellagio in Las Vegas is currently offering weekday rates starting at US$139 (S$195), aren’t the RWS rates a little on the high side?

Not according to hotel industry analyst Robert Hecker, who points out that the RWS prices are pre-discount ‘rack rates’.

More importantly, the ‘demand generators’ contained within the integrated resort make it natural for RWS hotels to charge a premium, said Mr Hecker, who works at consulting company Horwath HTL.

Comparing rates with Las Vegas might not be appropriate, he thinks. ‘Las Vegas is still hurting badly from the recession. And Singapore’s tourism curve is on the rise.’

Source: Straits Times, 16 Jan 2010

Foreigners again look to buy homes on the island as the economy improves

AFTER a muted 2008, property sales at Sentosa Cove picked up again in 2009 as buyer interest returned to the high-end and luxury segments of Singapore’s property market.

According to data compiled by Savills Singapore, 125 non-landed and 33 landed homes were sold on the island in 2009, up from 67 non-landed units and just five landed homes in 2008.

And more homes worth more than $10 million apiece were also sold on the island last year. Savills’ data shows that 30 homes worth $10 million and more were sold at Sentosa Cove in 2009, compared to just one such property in 2008 and 15 during the height of the property boom in 2007.

Developers and analysts say that with the global economy picking up, foreigners are once again looking to buy properties on the island.

Sentosa Cove is the only place in Singapore where foreigners can own landed property without special permission.

‘Sentosa Cove with its unique lifestyle offerings has already attracted a strong following of high net-worth individuals from around the globe,’ said DTZ managing director Margaret Thean.

She noted that the recent sales of Malaysia-based YTL Corporation’s Kasara project at Sentosa Cove demonstrates the optimism of market sentiment and confidence in Singapore’s luxury property market, which is expected to be further strengthened with the completion of the developments around the Marina Bay Financial Centre and the two upcoming integrated resorts.

YTL said last week that it has sold six of the 13 villas at Kasara at prices ranging from $14 million to $22 million. This works out to about $1,600 per square foot on average. Buyers included foreigners from Asia-Pacific and Europe.

The improved sentiment means that potential buyers can expect project launches on the island soon. City Developments is expected to launch its 228-unit luxury project The Quayside Collection soon.

The property group last year announced that it will delay launching the project due to the subdued property market and global economic uncertainty but will proceed with construction.

And Ho Bee Investment could also launch its two remaining Sentosa Cove projects later this year. The group has the 151-unit Seascape as well as Pinnacle Collection, which has some 280 apartments in all, left in its portfolio.

Source: Business Times, 14 Jan 2010

KASARA The Lake, an exclusive development of 13 luxury villas in ultra-posh Sentosa Cove, was formally launched yesterday after well-heeled VIPs snapped up half a dozen of them last month.

Six out of the seven villas put on sale initially were sold during the preview, open only to VIPs. Of those villas sold, the biggest 15,070 sq ft villa went for a little over $22 million.

The developer did not disclose just what type of VIPs the buyers were, except that three were Singaporean and the others foreign – Asian and European, including one Singapore permanent resident.

The positive response from Kasara’s preview despite the festive market lull reflected significant demand in the luxury property market, according to YTL Singapore managing director Kemmy Tan.

YTL Singapore is the developer of Kasara, as well as another project, Sandy Island, at Sentosa Cove.

The villas, ranging in size mainly from 9,000 sq ft to 10,000 sq ft, were launched at a price of about $1,610 per sq ft (psf). A single 14,600 sq foot villa is still up for grabs for anyone with a spare $15 million or $20 million or so.

Consultancy Savills Singapore managing director Michael Ng said the price would probably be raised gradually to $1,700 psf on average.

The posh development offers a view of the lake facing the Serapong golf course and a pool that has been designed to extend slightly above the lake amid a landscape of bamboo and eucalyptus trees.

The developer is counting on the prospect of the upcoming Sentosa integrated resort to help attract buyers.

Ms Tan said: ‘Foreign demand is increasing due to the presence of the integrated resorts, and Sentosa Cove, being the only area where foreigners can buy landed property, is well placed.’

DTZ South-east Asia executive director and head of consulting Ong Choon Fah said Singaporeans now formed a smaller proportion of buyers at the cove.

‘In the past two years, Singaporean buyers have decreased to 37 per cent (from about 50 per cent). The balance of 63 per cent are foreigners, permanent residents or companies.’ The profile of foreigners has widened to include those from Britain, the United States, Russia, Malaysia, India, Europe and Australia.

Ms Tan said the wealthy are gradually returning to the market, which is evident in deals done. Prices at Sentosa Cove rose to an average of $1,500 psf around the third quarter of last year from $1,100 psf to $1,200 psf in the first quarter of last year.

According to Savills’ analyses of Sentosa Cove Realis data, 80 per cent of transactions took place in the second half of last year when 25 sales were made – far higher than the five in the first half.

Savills said that 16 sales recorded in the fourth quarter did not include the sales of Kasara villas.

Ms Tan believes interested parties will buy now to take advantage of anticipated future price gains given the limited supply of about 320 properties at the cove and an expected upswing in demand.

Savills is suggesting that Sentosa Cove is undervalued.

‘The luxury end is a laggard. Investors are coming in now as they see a lot of upside in the high-end segment, where prices are still 25 per cent to 30 per cent away from the previous peak,’ said Mr Ng.

All bets seem to be on the high-end luxury market this year, according to industry players. They believe that if Kasara The Lake continues to be successful, this could encourage developers back into the high-end property segment.

Mrs Ong cited the example of CapitaLand’s recent Urban Suites launch, and speculated that projects located on the fringes of traditional prime districts might follow suit and get going again.

Source: Straits Times, 7 Jan 2010