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Tuesday, June 10, 2008

IOI Properties confident Sentosa Cove condos can sell

KUALA LUMPUR: IOI Properties Bhd is confident that its biggest high-end development in Singapore’s Sentosa Cove will be a success despite soaring crude oil prices and a softening property market in the republic.

Executive director Datuk Lee Yeow Chor said the group had foreseen the market softening and construction costs rising when subsidiary IOI Properties (S) Pte Ltd and joint-venture partner Ho Bee Investment Ltd successfully tendered for a 5.3-acre 99-year leasehold land called Pinnacle Collection in Sentosa Cove in January for S$1.09bil (RM2.5bil).

The price is about 13.9% more than the reserved price of S$963mil.

“When we tendered for the land last December, the residential market in Singapore was consolidating. It’s good to have a correction as the market went up too fast, by 31%, last year,” Lee told StarBiz after shareholders approved the deal at an EGM yesterday.

Lee said what was more important was the land’s potential as it was the last piece of condominium land parcel in Sentosa Cove.

He said Sentosa Cove had three major attributes – a famous name; a seafront property that would attract many international high-net worth investors; and its location near the integrated resort-cum-casino development where the Genting group would be investing S$5.3bil.

“We believe the integrated resort will give Sentosa Cove a big boost when it (resort) is completed end-2009. We have timed our development (Pinnacle Collection) with the completion of the resort so that people can see the full potential of the place,” he added.

Lee said the group planned to build condominiums, priced about S$3,000 per sq ft.

Pinnacle Collection, to be launched next year, will have seven 18-storey blocks and a 20-storey luxurious condominium. It will have 280 apartments and penthouses of various layout and sizes.

“The average size (per unit) would be 2,500-3,200 sq ft. There will be private lift lobbies. It will cater to the international market,” Lee said, adding that besides Singapore, it would target investors from Indonesia, China, the Middle East and India.

It will have a total development cost of S$1.6bil and estimated gross development profits (before interest costs) of S$500mil.

To be completed in early 2012, it will be funded from sales proceeds, borrowings by joint-venture company Pinnacle (Sentosa) Ltd (IOI Properties and Ho Bee will have 65:35 ownership) and advances from shareholders. Sales will commence in mid-2009.

The Pinnacle Collection is one of two condominium parcels that flank the entrance of the marina leading to Sentosa Cove.

It is adjacent to the 3.6-acre leasehold Seaview Collection, which was successfully tendered by another IOI Properties subsidiary with Ho Bee in March 2007. Seaview Collection, a luxury condominium project comprising two eight-storey apartment blocks with 151 units, will be launched in the third quarter.

By The Star - StarBiz - (by S.C.Cheah)

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