SC Capital Partners, which currently manages US$1.8 billion worth of property assets, plans to re-enter Singapore’s residential market once home prices have fallen by another 20 to 30 percent, according to its founder Suchad Chiaranussatti and reported the media.
The Asian property fund manager has made this decision following the S$12 million loss it incurred from the sale of high-end apartments at the Patterson Suites condominium to Blackstone Group LP in January.
It sold 18 units at the development for only S$2,100 psf after acquiring them for around S$2,300 psf in 2011, amidst the government’s property curbs that have cooled down the local housing market. “The intensity and severity of the policies caught us by surprise,” he said.
In Q1 2015, home prices in Singapore declined for the sixth straight quarter, representing its longest losing streak in over 10 years. But it is the high-end residential segment that has borne the brunt of the property cooling measures, as prices have slumped by at least 20 percent since the beginning of 2013, according to the Real Estate Developers’ Association of Singapore (REDAS). This segment consists of homes larger than 1,500 sq ft and costing above S$2,400 psf.
Looking ahead, Chiaranussatti believes that the government is unlikely to lift the curbs in the next two years. “With interest rates on the way up, there will be pressure. The policy is working; there is no reason whatsoever for the government to relax it,” he shared.
On the other hand, Blackstone’s CEO Steven Schwarzman is confident that Singapore’s cooling measures will be minimised over time. In fact, it has acquired a 10-storey apartment block in the country, in addition to its units at Patterson Suites, while a group of local investors have purchased 16 condo units near the Orchard Road shopping belt.
Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email cheryl@propertyguru.com.sg
