Monday, February 16, 2009

Buoyant property launches defy poor economy

New developments Caspian and Alexis report brisk sales, add buzz to market

(SINGAPORE) Frasers Centrepoint Ltd (FCL) has delivered much needed positive news by reporting that its 712-unit Caspian condominium near Jurong Lake is now 65 per cent sold with 460 units snapped up to date.

Over at Alexandra, the 293-unit Alexis @ Alexandra by joint venture partners Yi Kai Group and Fission Group is said to be fully sold.

Both developments were launched this month and together, total sales of 753 units have already topped new developer sales for the whole quarter of Q1 2008.

The demand for these two developments have taken many by surprise.

Mohamed Ismail, chief executive of PropNex, which is also the marketing agent for the 99-year leasehold Caspian, said that the sales target had initially been only 250 units for its first phase.

However, after these were sold out quickly at an average price of $580 psf, more units were released at the higher price of $600 psf.

It is understood that FCL will continue selling units as long as there are buyers and that it is comfortable with the pace of sales.

Giving his take on the Caspian's success, Mr Ismail said: 'The strategy in a down market is to look at the size of the units, reach out to buyers in the same area, and keep prices low.'

Alexis, a freehold development marketed by Huttons Asia was more expensive at around $1,000 psf. However, Mr Ismail noted that Alexis is a 'unique product' with small units. He added: 'It doesn't really matter what the per square foot price is these days. If the quantum is below $1 million, there will be many takers.'

While these sales figures are encouraging, Cushman and Wakefield managing director Donald Han said that the demand could be very 'project specific' with pent-up demand quickly satisfied.

A case in point could be City Developments Ltd's (CDL) 724-unit Livia condominium project in Pasir Ris. Livia was launched in July last year and 338 units have been sold as at end December at an average price of $650 psf. Over the weekend, CDL launched 30 units at an average of $620 per sq ft but the atmosphere at the showflat is said to be relatively subdued.

Still, the launch of Caspian and Alexis has added some buzz to an otherwise quiet market.
Some developers have noted that there are buyers waiting to move.

And Teo Hong Lim, chief executive of Roxy-Pacific, the parent company of Roxy Homes, has noticed that the sale of a few units can trigger a rash of buying because those waiting on the sidelines do not want to 'miss the boat'.

Mr Teo says that Roxy Homes sees about 70-100 visitors at its showflats a day.

East Coast Properties managing director Alvin Ng says he has also noticed an increase in visitors at its showflats with sales also picking up. Asked what is driving this in light of the poor economy, Mr Ng said: 'It's really anyone's guess.'

Source: Business Times - 16 Feb 2009

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