SC Global, one of Singapore’s leading luxury property developers, continues to achieve record-breaking selling prices, effectively fetching a premium for its projects, according to a report by Singapore Business Review.
Singapore’s independent stockbroking house Kim Eng revealed that the breakeven for 65 percent of SC Global’s unsold inventory ranges from S$1,600 psf to S$1,900 psf, which is significantly lower than today’s land cost in prime Orchard Road.
In addition, the company is valued at S$416 million, based on the current share price. This is below the estimated profits from the sale of 30 units at its flagship development, The Marq.
“The cost of land in Orchard Road can only go one way, up. The private en bloc market, the sole source of supply, is active only during the peak of the property cycle when consent to a collective sale can be garnered,” said Kim Eng.
“In the meantime, construction cost has crept up due to higher inflation and labour cost. In short, the high replacement cost of S$4,700 psf will support primary market prices. By and large, luxury units are limited in supply.”
It added that SC Global’s two largest developments — The Marq and Hilltops — comprise 65 percent of its total inventory.
“Their breakeven price of S$1,600 psf to S$1,900 psf is less than today’s cost of land in the Orchard Road area and significantly below our estimated replacement cost of S$4,700 psf.”
“This, together with the ability to fetch a premium for its products, makes SC Global our top pick for the luxury segment,” it concluded.
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