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Buy me, tear me down. |
On May 16, Singapore may record one of the most expensive single family dwelling sales in history. 33 Nassin Road - an 85,000 square foot plot with a swimming pool and tennis court located near Orchard Road and close by the Botanic Gardens, the residence of the British high commissioner, and the Japanese and Russian embassies - is on the block for S$300 million. The house is owned by the chairman of Wing Tai Holdings, a leading real estate and fashion retailer. The most expensive residential home sale ever recorded globally is a villa in France that sold for close to US$500 million in 2008. Reports are hard-pressed to find another transaction which would top this one in Singapore. Sure, there are other properties that are more highly valued, including India’s 27-story Mumbai palace-in-the-sky owned by Mukesh Ambani ($500 million, as blogged last year on this site). However, such landmarks are rarely if ever sold.
Before anyone considers this a done deal, there are a number of obstacles that need to be overcome. First and foremost is the price tag itself. The owner is asking S$3,500 per square foot for the lot, which is over 50% higher than the next highest comparable sale in the Nassin Road area. The plot can be subdivided and sold as five residences; however, each would need to be sold at close to US$50 million just to break even on the purchase price itself. Furthermore, foreigners are restricted from buying landed property in Singapore. Therefore, the buyer(s) will likely need to be locals. Even in cashed-up Singapore, finding five tycoons willing to shell out that much money for another residence is a stretch. Lastly, the economic climate is not in the seller’s favor. The government has been trying to cool down a red-hot property market through higher stamp duties and other measures. Economic growth has been slowing more than expected, reflecting softer global prices for natural resources and heightened austerity from China.
It will be an impressive bragging right for Singapore if the property can be sold for close to its asking price. It will be even more impressive if the house isn’t sold just to be torn down and re-developed as five smaller properties, thereby reducing the place to simply a number on a page. And a memory.