Singapore’s second-largest developer has taken a potshot at the prices of prime land in the city-state, describing them as exorbitant and predicting that they’ll only get even more expensive in years to come.
“In land-scarce Singapore, it is increasingly difficult to secure prime land of this scale and even if available, the asking price for land alone is exorbitantly high,” City Developments Ltd. said in an earnings statement. The comments referred to the 170,000 square foot (16,000 square meter) site the company bought for its Gramercy Park project, just off the Orchard Road shopping belt.
While Singapore’s residential property prices have been on the slide for 10 quarters after the government imposed an unprecedented series of curbs to cool buyers’ enthusiasm starting in 2009, the country remains Asia’s second-most expensive housing market. City Developments, run by billionaire Kwek Leng Beng, said it was fortunate to have secured the freehold Gramercy Park site in the earlier years, which afforded it the ability to offer it at current market rates, according to the statement on Wednesday.
“Future stock in this area is expected to be priced higher,” the company said in its results statement, referring to prime land prices. For Gramercy Park, “the group is in the midst of its regional overseas roadshows to promote the property, and interest has been positive,” it said.
City Developments put in the highest bid in 2006 and purchased the Gramercy Park plot on Grange Road for S$383 million ($278 million), according to an earlier company statement. Singapore is the most expensive place in the region to buy a luxury home after Hong Kong, according to a 2016 wealth report by estate agents Knight Frank LLP.
The developer reported a 14 percent decline in profit to S$105.3 million for the quarter ended March 31, while revenue slid 11 percent to S$723.3 million, the company said Wednesday.
The government has repeatedly signaled it is reluctant to lift the property cooling measures for fear such a move will lead to overheating in the market again. Finance Minister Heng Swee Keat said in his budget speech on March 24 that it was “premature” to relax the curbs, reiterating a view expressed in February by National Development Minister Lawrence Wong.
The residential curbs have included a cap on debt-repayment costs at 60 percent of a borrower’s monthly income and higher stamp duties on home purchases, after low interest rates and demand from foreign buyers raised concerns prices had risen too far too fast.
Article by Pooja Thakur Mahrotri via Bloomberg