It was reported that UOL/Kheng Leong sold about 70 units of Double Bay Residences at Simei over the weekend. Considering that it had sold about 80 units on the first day of the project's soft launch (prior to the weekend), we view this as a weak result. It is also below the company's expectations of 200 units by the end of opening weekend.
This brings to total 150 units in the 646-unit project that have been sold, though only about 250 units were launched in the first phase of sales. Our ground checks also indicate that the $600-650 psf price that was advertised for the project was mainly restricted to larger, lower-floor units or penthouse units. Most units were going from $670 psf upwards, with a one-bedroom unit even going as high as $800 psf. We estimate that the breakeven cost for this 99-year leasehold project is about $600 psf, translating to a margin of around 10-15% for UOL, which owns a 60% stake in the project.
The weaker than expected sales result is probably due to the fact that the project is not as attractively priced as, for instance, what F&N's The Caspian was selling at (starting at $580 psf at soft launch day, up to around $620 psf over opening weekend), considering the fact that both projects are leasehold, close to MRT stations and about the same number of MRT stations away from the city.
Also, there are some other projects near Double Bay Residences which might have given potential buyers more options and consequently, delay their decision-making process. We understand that City Dev's Livia (at Pasir Ris, 2 MRT stations away) is going for around $620 psf, while F&N's Waterfront Waves (at Bedok Reservoir, closer to the city though not next to any MRT station) is asking for around $620 psf (for pool-facing units) and around $700 psf (for lake-facing units). Both these projects are also 99-year leasehold projects. Sim Lian will also be launching a DBSS project near Double Bay Residences sometime this year.
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15 years ago
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