The most expensive penthouse in Singapore has been snapped up by Chinese billionaire Sun Tongyu, co-founder of e-commerce site Alibaba, signalling renewed interest among mainland buyers for luxury apartments in the city-state.
Sun, a Singapore permanent resident, paid a record-breaking S$51 million (HK$291 million) for the only penthouse unit at Le Nouvel Ardmore.
Located in the prime district at Ardmore Road, the swanky freehold development has only 43 large apartments.
This purchase works out to S$3,675 per sq ft for the 13,875 sq ft penthouse.
But given that 5,000 sq ft is a roof terrace, the apartment cost more than S$5,000 per sq ft for the indoor living area.
The transaction offers hope of a recovery for an anaemic market for Singapore’s prime district condominiums, which suffered eight straight quarters of price declines.
One high-profile loss was S$15.8 million by Japanese billionaire Katsumi Tada when he sold his prime district penthouse in March.
But the latest development confirms the view that Singapore’s high-end property is once again a magnet for wealthy mainlanders, thanks to the attractive price tags on luxury apartments following the introduction of property cooling measures in 2013. Significantly, these properties tend to be cheaper than in Hong Kong.
“The market for Hong Kong is mainland China but the Hong Kong design, ideology and planning systems are not too appealing as there is a feeling of claustrophobia or ‘claustro-city’, and such properties are not value-for-money,” said Ong Kah Seng, director of property consultancy R’ST Research.
“Property prices are also very high in Hong Kong and opportunities are tapering off for mainland China buyers.
“So Singapore, also a financial city that is seemingly even stronger than Hong Kong in recent times, has become a choice pick for Chinese buyers.”
Mainlanders continue to top the list of foreigners buying property in Singapore.
The number of properties purchased by Chinese nationals peaked in 2011, with 2,807 bought. That number dipped sharply to 995 in 2014, and is slowly picking up with 286 properties bought in the first five months of this year.
Most of the properties bought by the Chinese, about 70 per cent, cost S$1.5 million or less, said Eugene Lim from ERA, one of Singapore’s largest real estate agencies.
Only 4 per cent were priced above S$5 million. But mainlanders are the largest group of foreign buyers of these high-end homes, with 10 per cent of such transactions in the last 17 months.
“For the higher-end properties, the Chinese buyers are typically well-travelled businessmen, and they are likely to also own properties in Hong Kong, Sydney, Melbourne, and London,” Lim said.
With well-known Chinese tycoons such as Sun Tongyu picking up properties, analysts believe more high net-worth Chinese individuals will follow suit.
“However, they are usually quite discreet and you may only get to hear about it after the deal is done,” said Lim.
The number of rich Chinese buying properties in Singapore is still not as many as before, but analysts say it is an ideal time to enter the market.
“Prices are still at a low point and there are a lot of savvy, rich people on the lookout for good investment opportunities to take a position just before the market turns,” said George Tan, senior director at Savills Residential.