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Wednesday, March 12, 2008

Guocoland: KFH option on Singapore apartments lapses

PETALING JAYA: Kuwait Finance House (M) Bhd (KFH) is believed to have decided not to exercise the option on 97 apartments at the 210-unit Goodwood Residence development in downtown Singapore, given the softening in the city-state's private residential property market.

The apartments were supposed to be sold to a fund managed by KFH for US$818.4mil, or at S$3,000 per sq ft.

Goodwood Residence, developed by Guocoland Ltd, is a premier residential development on a 24,845-sq-m freehold plot fronting Goodwood Hill.

A Guocoland statement issued on Monday said the options were not exercised and had lapsed.

“Both parties are presently in discussions, with a view to granting fresh options for units in the development,” it said, adding that the private residential property market in Singapore was currently cautious.

KFH did not respond to StarBiz's queries.

Meanwhile, industry observers said Singapore's property market had shown signs of softening and take-up rates had slowed since January as a result of the US subprime market woes.

According to Abbey Woods Sdn Bhd chairman and managing director Datuk Wong Choon Kee, the market had seen substantial price appreciation in the past one year, with a new price benchmark of more than S$4,000 per sq ft set by some of the recently launched luxury residential projects.

SC Global Developments' Ardmore Apartments, launched in the last quarter of 2007, were sold at an average price of S$4,400 per sq ft while the company's The Marq on Paterson Hill fetched S$5,100 per sq ft.

Wong said Singapore's luxury apartment market was well supported by good fundamentals and the limited supply would continue to drive up prices in prime districts.

“Singapore is seen as the new Switzerland, with stricter secrecy laws making it an ideal investment destination for high net worth individuals.

“Niche projects in Sentosa Cove are favoured by buyers and developers. Going forward, prices of commercial and residential properties in prime locations will remain high although sales volume will, at best, be at slightly lower levels,” Wong said.

KFH is also an active participant in the Kuala Lumpur property market, especially around KL City Centre.

The Islamic bank is focusing on the super high-end residential and other investment grade commercial properties with potential for capital appreciation.

In January, KFH offered to buy 50% of the Menara YNH tower block for a whopping RM920mil, which translates into RM1,258 per sq ft – one of the highest prices among recent property transactions in Kuala Lumpur.

Last August, KFH, together with Khazanah Nasional Bhd and Jumeirah Capital, were awarded a 99-year leasehold concession to develop the 624-acre Cultural Cluster in Iskandar Development Region.

By The Star (by Angie Ng)

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