According to The Strait Times Singapore (last updated in July 2014), all units at Treasure in Balmoral, a luxury condominium in the exclusive Balmoral area near Orchard Road, have been put up for bulk sale.
The guide price for all of its units is a whopping $191.4 million. This translates to $1,850 psf for the 103,439 sq ft property. The EIO closes on August 21 at 3 pm.
Treasure on Balmoral is a freehold condominium located at Balmoral Road, District 10. The Balmoral area is renowned for being an upscale neighbourhood home to Singapore’s ultra-wealthy elite. High-end condominiums around the area include Balmoral Residences, One Balmoral, Pinewood Gardens, and The Balmoral.
Treasure on Balmoral was completed in 2013 and consisted of 48 units spread across two 12-storey buildings. The medium-scale property offers three- to four-bedroom units measuring 1,710 sq ft to 3,692 sq ft. It was developed by Hiap Hoe Group and designed by an award-winning architectural studio, Architects 61.
The luxury condominium was designed to suit the extravagant lifestyles of its upscale customers. It features a two-storey clubhouse with a multi-purpose room and a gym, a landscaped outdoor pool, and an entertainment deck for large-scale parties and social functions.
The luxury property is centrally located in the heart of District 10. It’s easily accessible via Stevens Road and Bukit Timah Road. It’s also only a short distance away from Orchard Road and only a 10-minute drive from the Central Business District. Within the immediate vicinity are prestigious educational institutions such as Raffles Girls’ School, Singapore Chinese Girls’ School, and Anglo-Chinese School.
Over the recent years, the high-end residential sector has been stuck in a slump. However, Hiap Hoe has chosen to make the bold move of selling all its units in bulk for a lower price to improve cash flow.
When Treasure on Balmoral was first launched last year, it only managed to sell only one unit. But that single sale was subsequently dropped later on. Ming noted that “the buyer chose to give up the property as a result of the announcement of market-cooling measures.” Hiap Hoe’s failure to sell the units resulted in the company exploring other opportunities to monetize the residential project. However, according to real estate analysts, developers only resort to this when sales are moving very slow.
Slow sales in the high-end residential market directly result from the repeated rounds of cooling measures and the Total Debt Servicing Ratio Framework. Nicholas Mak, the executive director of SLP International Property Consultants, says, “It is no secret that the high-end property market is badly affected, which is why we’re seeing developers offloading their projects. And for Hiap Hoe, a bulk sale is just one way for them to be able to exit this particular investment and move on.”
He also adds that it’s a sign of challenging market conditions. Usually, developers won’t take the bulk sale route when the market is optimistic since selling units individually is more profitable. However, selling in bulk requires Hiap Hoe to offer the units at discounted prices.
According to Desmond Sim, the head of research in CBRE, the developer will be relieved of the financial burden and risk of holding onto all of the property’s 48 unsold units if the bulk sale is successful.
He notes that “if there’s a buyer, they can offload everything in one transaction even if profits are smaller. If they sell units individually, it is difficult to sell out quickly in the current soft market, and in the long run, will only put pressure on their balance sheets.”
He also optimistically suggests that Treasure on Balmoral is still a high-value property investment due to its prime location; thus, the discounted $1,850 psf price tag is quite a bargain. In addition, if the bulk sale goes through, it will improve the developer’s cash flow.
However, Steven Ming, the managing director of Savills Singapore, told Strait Times that he expects “a strong price recovery in the high-end property market in the next property upswing since it has been (embattled) for quite a number of years.”
He remains optimistic, noting that this bulk sale is a rare opportunity for property investors to acquire a centrally located and high-quality real estate product as a property investment or strata sales exit in the future.