When it is fully developed in 2014, Sentosa Cove will have just over 2,100 homes.
Inspired by Port Grimaud in France, the area offers residents a style of living that is sharply different from what they can find on mainland Singapore. Residents in this gated waterfront enclave enjoy a resort lifestyle next to the sea, complete with private berth facilities.
The area – which has been just one big amorphous construction site in the past two years – is slowly taking shape. Access has been enhanced with improved road infrastructure, and Resorts World Sentosa is nearing completion, with the partial opening of four hotels on Wednesday.
Other parts of Sentosa have been or are being upgraded. As the jigsaw pieces fall in place and a far more vibrant Sentosa emerges, more buyers – especially foreigners – will be drawn to housing there.
In 2004, when Sentosa Cove’s first project, The Berth by the Cove, was launched, only 26 per cent of the units were taken up by non-Singaporeans – that is, permanent residents (PRs), foreigners and companies.
The proportion of foreign buyers has increased since then. Last year, non-Singapore citizens accounted for around half of the transactions at Sentosa Cove.
In contrast, non-Singaporeans made up only 38 per cent of the buyers of waterfront housing in Districts 1 and 4, which cover Marina Bay, the HarbourFront and Telok Blangah.
When Seven Palms at Sentosa Cove was launched in October last year, four of the six units in the condominium were bought by foreigners: three from Hong Kong; the other from the Philippines.
Similarly, three of the six units sold during last month’s preview of Kasara were taken by non-Singaporeans.
In the past two years, the top foreign and PR buyers at Sentosa Cove have hailed from Indonesia, Malaysia, Britain and China – mirroring those who bought homes in Districts 9, 10 and 11.
However, the proportion of Indonesian buyers at Sentosa Cove dropped during this period. They made up less than a fifth of the home sales at Sentosa Cove, but accounted for more than a third of the private home transactions in the prime districts.
Malaysians also accounted for fewer home sales at Sentosa Cove – 16 per cent, against 22 per cent in the prime districts.
In contrast, British and mainland Chinese buyers took up more homes in Sentosa Cove than they did in the prime districts.
The British accounted for 14 per cent of home sales at Sentosa Cove, compared with just 6 per cent in the prime districts.
Similarly, mainland Chinese bought 12 per cent of homes in Sentosa Cove, but just 7 per cent of homes in the prime districts.
During the boom period in 2007, Sentosa Cove homes did as well as other waterfront homes in mainland Singapore, and homes in Districts 9, 10 and 11. Prices in these segments outstripped those for the rest of the market.
Landed homes in Sentosa Cove cost only slightly less than the much-coveted good class bungalows (GCBs), although they have smaller land areas and 99-year leasehold tenures.
For detached houses in Sentosa Cove, the land area typically ranges from 650 sq m to 950 sq m, or about 7,000 sq ft to 10,225 sq ft. Price-wise, they cost $11 million to $16 million in the second half of last year.
As a comparison, a freehold GCB with a land area of 1,400 sq m to 2,000 sq m costs $12 million to $19 million.
Detached houses in Sentosa Cove are now fetching far higher prices than they did during the 2007 property boom. Buyers who bought these homes then and sold them last year have made a profit of 25 per cent on average.
In contrast, freehold detached homes in prime districts enjoyed an 18 per cent rise in price between 2008 and last year.
When fully developed, Sentosa Cove will have only around 400 landed homes, whereas there are about 2,500 GCBs on the mainland. The limited supply of Sentosa homes could explain why they are so desirable.
Furthermore, Sentosa Cove is the only place in Singapore where foreigners are allowed to own landed homes without first becoming PRs.
Singapore has always been viewed as a safe haven for investment because of its political stability, well-regulated property market and transparent policies.
With the integrated resorts at Marina Bay and Sentosa due to open soon, investors are likely to turn more confident about Singapore’s private property market.
Well-heeled foreign investors are increasingly turning their attention to the high-end segment of the property market here, which has historically shown greater upside potential during periods of economic expansion.
This group of investors has a preference for trophy investments that offer unique attributes. Hence, Sentosa Cove homes are likely to attract heavy interest as economic prospects brighten.
The writer is head of South-east Asia research at DTZ Debenham Tie Leung.
Source : Sunday Times – 17 Jan 2010
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