Global investment and advisory firm Blackstone is said to be doing due diligence for bulk purchases of luxury residential units in Singapore, reported the media.
Blackstone is said to be in talks to acquire 18 four-bedroom apartment units at Paterson Suites (pictured), with market watchers expecting prices to be around $2,100 psf.
The 18 units, which add up to 39,535 sq ft, are held by a fund in the Real Estate Capital Asia Partners (Recap) series that is being managed by SC Capital Partners. They are part of the stack of 20 units that Recap fund purchased from the project’s developer, Bukit Sembawang in 2010 for $118.61 million or $2,700 psf. In 2013, Recap sold two of the units at $2,596 psf and $2,775 psf. Situated in the Paterson Road/Lengkok Angsa area, Paterson Suites obtained Temporary Occupation Permit (TOP) in the third quarter of 2010.
Blackstone is also said to be doing due diligence on a 10-storey property at about $159 million or almost $1,860 psf based on the strata area of 85,552 sq ft. Located along Anderson Road, 21 Anderson is owned by Arch Capital, which was set up by Ayala Group.
The $159 million price is significantly lower compared to the property’s indicative price of $250 to $260 in 2013, when it was listed for sale via an expression of interest exercise. It is also below the $200 million or $2,337 psf that Arch paid for the property in 2010.
According to Ku Swee Yong, Chief Executive of Century 21, “Funds making bulk purchases in residential projects would be expecting to buy at between 30 and 40 percent off the current market.”
“This is to account for the 15 percent ABSD (additional buyer’s stamp duty), the very low LTV (loan-to-value) of 20 percent on their investment, plus their profit margin. So the consequent market valuation around these locations will drop. Technically on paper this is very negative for the market,” he added.
Image source: bukitsembawang.sg
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
