Several landed homes have gone up for auction after the developer was unable to complete construction work.
Several properties by boutique developer C&C Development have recently gone under the hammer, with the firm winding up its business last Friday (22 July), reported The Straits Times.
C&C Development’s woes mirrors the current state of the property market.
Last Wednesday (20 July), one of C&C’s partly built double-storey, semi-detached homes with attic and basement in Kingswear Avenue, Serangoon Gardens, was put up for mortgagee sale by Colliers International. With an opening price of $2.8 million, the property received no bids.
JLL’s auction in May also featured other C&C properties — a pair of uncompleted 21/2-storey semi-detached homes in Berwick Drive, Serangoon Gardens; an uncompleted 31/2-storey bungalow with a lift and pool in Mimosa Crescent, Yio Chu Kang; and a new 21/2-storey semi-detached home in Burghley Drive, also in Serangoon Gardens.
Sold as a pair, the Berwick Drive homes carry a guide price of $7.2 million, $12 million for the Mimosa Crescent home, and $3.7 million for the house in Burghley Drive.
Grace Ng, Head of Auction and Sales at Colliers International, noted that developers may hit trouble after paying a very high price for land and then find it hard to sell the properties at target prices since the market has already corrected.
According to caveats data, C&C acquired the four sites between May and October 2013, or around the last market peak.
Caveats for the 2,164 sq ft site in Kingswear Avenue showed that it was sold in August 2013 for $2.5 million before C&C purchased it in October that year for $4.2 million. It also acquired the 2,799 sq ft site in Burghley Drive for $3.15 million; and the 5,296 sq ft Berwick Drive site for $5.858 million. All three sites are 999-year leasehold.
Meanwhile, C&C bought the 8,159 sq ft site in Mimosa Crescent for $8.68 million.
In March, the firm’s sole shareholder, Chua Kwong Kheng, was declared an undischarged bankrupt.
His 90 percent owned company — Workshop I.D. & Build, which is described as a furniture manufacturer and general contractor, is also being liquidated, based on company records.
The troubles facing C&C is nothing new.
“These types of properties were also listed as mortgagee sales during the Asian Financial Crisis, when owners or developers were unable to complete the construction due to cash-flow issues,” said Ng.
She noted that lenders can sell the uncompleted properties on an “as is basis”, or complete the construction prior to putting them up for sale.
Although the auctioneers are unaware of any other developers putting their properties on auction, they believe that other smaller developers may have run into a similar problem.
In fact, Chua Beng Chye, partner with the Restructuring and Insolvency Practice Group at Rajah & Tann, noted that there are a growing number of property and construction firms facing financial headwinds.
“This is largely due to the escalating costs and slowdown in the property market,” he said.