View of Starlight Suites in the River Valley area. (Source: www.starlightsuites.org)
To avoid paying extension charges, the 23 remaining unsold units in Starlight Suites in River Valley have changed hands for around $48 million to a firm linked to Evia Capital, reported The Straits Times.
The selling price translates to around $1,670 psf, down from the average price of about $2,000 psf recorded during the project’s launch in 2010. The transaction was carried out through a divestment of stocks in the developer, Meadows Property (Singapore).
Given that the developer is now fully owned by Singaporean stockholders, while its directors are all Singapore citizens, it is no longer restricted by the Qualifying Certificate (QC) rules. This means it no longer has to pay extension charges even if it fails to dispose all the units by the deadline in end-May, or within two years of completing the project.
The units sold are spread across different floors, with sizes ranging from around 560 sq ft for a one-bedder to more than 3,000 sq ft for a penthouse.
This is not the first time that stocks in a property developer were sold to skirt the extension charges. In 2015, 16 leftover units at 111 Emerald Hill were transacted for about $75 million. Back then, the seller was a fund run by LaSalle Investment Management, and shares in the developer Emerald Land were acquired by firms that are fully owned by Singapore citizens.
Meanwhile, Savills Singapore’s Research Head Alan Cheong revealed that the bulk sale in Starlight Suites could raise the bidding prices for the nearby Martin Place site, which was released under the Government Land Sales (GLS) Programme, with the tender closing on 28 June.
“With Evia securing a foothold in the area, it sets up the condition for game theory to be applied. For example, if Evia bids for the Martin Place GLS site that results in the end product price being equal to or higher than what they paid for Starlight, they could still use the former to defend or as a higher comparative to sell units in the latter.”
“If Evia does not bid or even win despite tendering at a higher price for the Martin Place site, the successful bidder will nevertheless still help Evia buttress its Starlight’s valuation,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
