Trouble in paradise?

Many of the world’s richest have homes in Sentosa Cove. However, the fall in stock prices, plunge in oil prices and volatile currency markets have affected some of the wealthiest, as seen in several transactions at Singapore’s exclusive waterfront residential enclave.

Last October, a bungalow on Lakeshore View was sold for $23.8 million ($2,775 psf), according to a caveat lodged with URA Realis. It was considered the highest price since two neighbouring bungalows were sold at higher prices of $2,952 psf and $2,922 psf in May and June 2013 respectively.

The bungalow on Lakeshore View is one of just 19 that enjoy “triple views” of the lake, Serapong Golf Course and the sea from the front of the house, and vista of greenery from the rear, says Steve Tay, vice-president of resale at CBRE Realty Associates, who was the exclusive marketing agent for the property on behalf of the owner. The property sits on a land area of 8,579 sq ft and has a built-up area of 12,600 sq ft. The house has three levels, with five en suite bedrooms, a gourmet kitchen and dining room, living room, private cinema and tatami room.

The buyer, said to be a mainland Chinese businesswoman, had obtained approval from the Land Dealings (Approval) Unit of the Singapore Land Authority (SLA) and exercised the option to purchase the property. Six months on, the sale has yet to be completed and may have hit a snag. CBRE’s Tay declined to comment on it.

This house on Lakeshore View was sold for $23.8 million last October, but the buyer has since been uncontactable

Aborted deal?
The property was sold by three members of a Hong Kong family, who are now in a bind. “On paper, the property has already changed hands, as a caveat has already been lodged,” says a property consultant who specialises in luxury property deals in Sentosa Cove and other prime residential districts. The buyer, on the other hand, is uncontactable, according to sources.

What recourse does a seller have in such a situation? He should find out his legal rights under the terms of the sale contract, including the right to rescind and to forfeit the deposit paid, says Lee Liat Yeang, partner of law firm Rodyk & Davidson LLP. Separately, the seller’s lawyer might be able to find out more information from the buyer’s lawyer, he adds. “This can help the seller decide on the appropriate course of action.”

An application can also be made to the Registrar of Land Titles to contend that the caveat lodged “is being allowed to remain vexatiously or frivolously [in view of the rescission of the sale contract]”, says Lee. The registrar will then give notice to the buyer that the caveat shall be cancelled within 30 days unless an order by the court to the contrary is received.

According to sources, the owner of the bungalow on Lakeshore View is trying to get the caveat removed.

The reality is that most sellers cannot really choose their buyers, especially in the current slow market. “One takes whoever offers the best price,” says Lee. “It is always important to try to negotiate a higher deposit sum from a foreign buyer and ask for a shorter completion period. This helps but does not prevent a ‘bad buyer’ incident.”

Troubled sales on Lakeshore View
Six doors away, another bungalow on Lakeshore View changed hands for $26 million ($2,922 psf), according to a caveat lodged in June 2013. The house sits on a land area of 8,922 sq ft — one of the largest on Lakeshore View. The house has remained vacant for much of the last two years because the mainland Chinese buyer never had a chance to move in, say sources. A property title search showed that the property was transferred to Zhu Xingliang in November 2013.

Zhu may not have had a chance to move into his new home in Sentosa Cove because, according to a South China Morning Post report in January 2014, he was arrested on suspicions of corruption shortly after the purchase. A billionaire and one of the wealthiest in Jiangsu province, Zhu, 57, is founder of Shenzhen-listed interior design and construction firm Suzhou Gold Mantis Construction Decoration Co, Ltd. He was said to have been implicated in the investigation of Nanjing mayor Ji Jianye, who was sacked in a graft probe in October 2013.

Gold Mantis was involved in the construction of many major projects in China, including the National Stadium for the 2008 Beijing Olympic Games, the National Centre for the Performing Arts and the National Museum of China, according to a China Daily report on Jan 28, 2014. Zhu was the largest shareholder of Gold Mantis, and the firm had said then that business was operating normally, following his arrest. The company subsequently announced in February 2015 that Zhu had been released on bail, according to a news report.

It looks like the house on Lakeshore View may soon be occupied. It is undergoing massive renovation, which began early this year, according to agents on the ground.

Vacant houses in Sentosa Cove are a common sight, says Swee Shou Fern, DTZ senior director of investment advisory services. “When you drive around Sentosa Cove, you will see many empty houses,” she says. “Even though the houses are completed, you still see wires hanging from the ceilings and walls. They are clearly unoccupied.”

Cove Grove home for sale

Elsewhere in Sentosa Cove, a bungalow on Cove Grove has been put on the market for sale. The house is said to be owned by Lee Kian Soo, founder and chairman of Singapore-listed offshore marine services firm Ezra Holdings as well as the father of Ezra group CEO Lionel Lee. Like other companies that are service providers for the oil and gas sector, Ezra’s share price was not spared when oil prices fell sharply last year.

Lee’s bungalow on Cove Grove commands a 270-degree view of the waterway. It sits on a land area of 11,500 sq ft, has a built-up area of 12,500 sq ft and comes with five en suite bedrooms. As the house has an auspicious address, it is priced from $23 million ($2,000 psf).

“There’s been interest from local buyers as well as those from China, Hong Kong, India and Indonesia,” says DTZ’s Swee, who is marketing the property. “It’s quite a mix of nationalities.”

The Cove Grove bungalow owned by Lee Kian Soo, founder and chairman of Ezra, is on the market for $23 million

Lamborghini offered with Cove Way house

Last October, a bungalow on Cove Way was offered for sale at $14.8 million, and it included a brand-new Lamborghini Huracan worth more than $1 million as part of the package. The house has a built-up area of 4,143 sq ft and four en suite bedrooms. It sits on a land area of 8,060 sq ft and offers a 180-degree view of the waterway.

While the offer of a Lamborghini did stir interest, most potential buyers were more interested in getting a discount equivalent to the price of the supercar, if not higher.

“Negotiations have been ongoing, and we have an offer of $11.5 million,” says Bruce Lye, managing partner of SRI5000, exclusive marketing agent for the property. The price excludes the Lamborghini. “We’re still at a deadlock, but we hope to conclude a deal soon,” he adds. The potential buyer of the house on Cove Way is said to be an Indian national.

The owner of the house on Cove Way is an Indonesian who had customised the house for his needs, incorporating feng shui elements such as a bonsai tree for longevity, a koi pond with 88 fish and direct water views. It even comes with a home lift and a palatial wheelchair- friendly master bathroom in the master suite on the first level. The house was designed by renowned architect MKPL Architects and completed in 2010. The owner never moved in.

View of the infinity pool and waterway from the house at Cove Way

Lull in bungalow transactions
In 2015, there were just four bungalow transactions in Sentosa Cove totalling $66.8 million, or an average of $2,018 psf. This excludes the sale of the house on Lakeshore View in October. Prior to that, a house on Treasure Island was sold for $14.3 million ($1,706 psf) in August, according to a caveat lodged. In July, a seafront house on Ocean Drive was sold for $18 million ($2,383 psf).

There has been a lull in bungalow transactions in Sentosa Cove so far this year, with no caveats lodged. Still, there has been no lack of interest in the 99-year leasehold waterfront homes in the exclusive enclave, says CBRE’s Tay, who has been a specialist in the marketing of luxury bungalows in Sentosa Cove for the last four years. Enquiries from Singaporeans and foreigners, particularly those from India, Indonesia, Malaysia and China, have picked up, he says.

Massive renovations are taking place at the house on Lakeshore View that had been vacant for much of the last two years

DTZ’s Swee agrees. “There are offers for properties, and I foresee deals in the latter part of the year, provided the price gap between buyers and sellers narrows further,” she says.

While there have been mortgagee sales of luxury condominiums in Sentosa Cove, there has yet to be a distressed sale of bungalows there. “I don’t see many foreign buyers who are financially weak today,” says Rodyk & Davidson’s Lee. “But if the financial markets crash and the economy takes a turn, you can expect to see more mortgagee sales.”

This article appeared in the City & Country, Issue 725 (April 25, 2016) of The Edge Singapore.

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