GuocoLand to sell down remaining units at Leedon Residence to reduce QC charges

SINGAPORE-listed GuocoLand Ltd has sold another 42 of its remaining 95 units at Leedon Residence in the first three months of 2017. This brings total sales in the 381-unit, freehold, high-end condominium in prime District 10 to 328 units, which means the project is 86% sold.

Of the 42 units sold, 32 were two- to four-bedroom units of 1,044 to 2,659 sq ft, with prices ranging from S$2.43 million (RM7.67 million) (S$2,327 psf) to S$6.4 million (S$2,410 psf), based on caveats lodged. The remaining 10 units sold were a mix of five-bedroom units, garden suites and penthouses ranging from 3,789 to 8,051 sq ft. They were priced from S$5.7 million (S$1,504 psf) to S$12.5 million (S$1,553 psf).

About 69% of the buyers were said to be Singaporeans and permanent residents, while 24% were foreigners. The remaining 7% of buyers were corporate entities.

GuocoLand has more than two months to sell the remaining units in Leedon Residence. This is because its Temporary Occupation Permit was issued on June 15, 2015. The conditions for the Qualifying Certificate is that foreign developers — including listed companies with at least one foreign director or shareholder — have to sell all the units in the project within two years of obtaining TOP. Failure to do so will incur extension charges, which are based on the land cost and pro-rated according to the proportion of unsold units in the development. The QC charges are 8% for the first year of extension, 16% for the second year and 24% for the third.

Based on the 53 units still available at Leedon Residence, the extension charges for the first year is estimated to be S$9.3 million, which is equivalent to the price of a 4,704 sq ft, five-bedroom unit that was sold last month.

 To further facilitate sales, GuocoLand is offering buyers the option of a deferred payment scheme, which was introduced last October. Under the DPS, buyers need only pay a 5% down payment, 15% upon exercising the option two weeks later and the remainder two years later. Those who opt for the DPS can choose to stay in the unit or lease it out.

Purchasers who opt for the normal payment scheme need to pay a 5% down payment, another 5% upon exercising the option a fortnight later and the remainder eight weeks later.

According to sources, about 24% of the 42 buyers this year opted for the DPS.

Bruce Lye, managing partner of SRI, says the strong take-up rate at Leedon Residence in 1Q2017 was not surprising. Lye brokered the sale of two of the largest units in the development in February. The first was a 8,051 sq ft, five-bedroom garden suite unit, which changed hands for S$12.5 million (S$1,553 psf). The second was a 4,704 sq ft, five-bedroom unit, which was sold for for S$8.8 million (S$1,871 psf).

Lye attributes the healthy sales to pent-up demand and the quality of the project by GuocoLand. Leedon Residence was designed by Chan Soo Khian of SCDA Architects. Chan is known as the designer behind luxury condos such as The Marq on Paterson Hill, Nassim Park Residences and TwentyOne Angullia Park.

This article first appeared in The Edge Property Singapore, a pullout of The Edge Singapore, on April 10, 2017.

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