Boutique developer wound up in Singapore property market slowdown

Several uncompleted houses have come up for mortgagee sales in recent months from a boutique developer that was wound up last Friday.

The woes of C&C Development reflect the state of the property market.

The latest home partly built by C&C, a double-storey, semi-detached house with basement and attic in Kingswear Avenue, Serangoon Gardens, was put up for mortgagee sale by Colliers last Wednesday. There were no bids at the opening price of $2.8 million.

Other C&C properties featured in JLL’s auction in May. These comprised an uncompleted 3 1/2-storey bungalow with a pool and lift in Mimosa Crescent, Yio Chu Kang; a pair of uncompleted 2 1/2-storey semi-detached houses in Berwick Drive, Serangoon Gardens; and a new 21/2-storey semi-detached house in Burghley Drive, also in Serangoon Gardens.

Indicative prices for the properties are $12 million for the Mimosa Crescent house, $7.2 million for the Berwick Drive houses, which are to be sold as a pair, and $3.7 million for the Burghley Drive house.

Developers may hit trouble after paying too much for land and then finding they cannot sell the properties at target prices as the market has corrected, said Ms Grace Ng, head of auction and sales at Colliers International.

C&C acquired all the sites between May and October 2013, according to caveats. That was around the last market peak.

Caveats for the 2,164 sq ft, 999-year leasehold Kingswear Avenue site showed that it was sold for $2.5 million in August 2013 before C&C bought it for $4.2 million in October that year.

It bought the 8,159 sq ft, freehold Mimosa Crescent site for $8.68 million. The 5,296 sq ft Berwick Drive site went for $5.858 million, while the 2,799 sq ft Burghley Drive site fetched $3.15 million. Both are 999-year leasehold.

The sole shareholder of C&C Development, Mr Chua Kwong Kheng, was made an undischarged bankrupt in March.

Another company of which he has a 90 per cent stake, Workshop I.D. & Build – described as a furniture manufacturer and general contractor – is being liquidated as well, according to company records.

When The Straits Times visited C&C’s registered address yesterday, a staff member at business advisory firm DP Bureau, which C&C uses as a virtual office, said it has not been collecting its letters for over a month.

The strife the firm is in has been seen before.

“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 Ms Ng.

For uncompleted properties, lenders can sell them on an “as is basis” in their existing condition, or step into the shoes of a builder and complete the construction before putting them up for sale, she added.

While the auctioneers were not aware of any other developers with properties coming up for mortgagee sale, other smaller developers could have run into a similar situation, they said.

A bankruptcy lawyer noted an increase in construction and property firms facing financial headwinds.

“This is largely due to the escalating costs and slowdown in the property market,” said Mr Chua Beng Chye, partner in the restructuring and insolvency practice at Rajah & Tann.