From 'fractions of condo' to a new tack

Primespace is now trying to sell 2 other properties by tender

(SINGAPORE) A company which was marketing 'shares' in condominium units just a few weeks back has adopted a new tack, and is now putting apart-ments up for tender.

Following a model similar to that of an unlisted property trust, Primespace Investments Pte Ltd initially promoted 'fractional ownership' in two studio apartments, one at One-North Residences and another at One Shenton.

As BT reported on Monday, the apartments would be bought and held by other private limited companies, and investors would pay for shares in those vehicles. This is an unusual way of selling residential property in Singapore.

Each of the vehicles' share capital would be split into 15 lots. A lot in the company holding the One-North unit would cost US$62,000; a lot in that which owns the One Shenton unit would cost US$110,000.

Primespace has since revamped its website, which is no longer marketing 'fractional ownership' in condominium units. It is now trying to sell two other apartments through tender. This is again an uncommon sale method.

One apartment is a two-bedder at One Shenton and the other is a three-bedder at Treasure Place off South Buona Vista Road. Interested bidders can obtain the tender documents or find out more about the units only by sending Primespace an email message.

Bidders will have to mail the tender documents and deposits back to the company.

Primespace is also inviting property owners to register their units for sale via tender. An interested seller has to set a reserve price, and the unit would be considered sold at the end of the tender exercise once the highest bid exceeds this price.

The company claims that properties can be 'sold faster and at a better price' through this route, as compared with the usual way of getting property agents to market units.

Primespace will charge a commission fee of 0.8-1 per cent of the final sale price. Property agents can charge anything from 0.5-2 per cent depending on the home's popularity and sale price.

The claim that properties sell faster and better through tenders is debatable, says a property market insider. A lot depends on how actively the company promotes the apartments, and how attractive the units are to draw bids, he says.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak adds that the speed of sale also depends on the duration of the tender. He points out that companies conducting tender exercises will have to make sure that they can enforce the bids which come in.

Nevertheless, selling apartments through tender would seem less complicated than selling 'fractional ownership' in them, he says.

Source: Business Times, 1 Oct 2009