The Nassim deal a win-win: Analysts
The sale of 45 units at The Nassim (above) to Mr Wee is the latest in a series of deals that have seen developers save on paying Qualifying Certificate penalties. CapitaLand avoided paying penalties that would have hit $9.3 million if the 45 units had been left unsold by August.PHOTO: KHENG LEONG
Developer reaped profit in bulk sale, while buyer got a good discount
Lee Xin En
While developer CapitaLand had to give veteran banker Wee Cho Yaw an attractive discount when he bought 45 of its plush condominium units, analysts say it was a win-win deal for both parties.
On Monday, it was announced that Mr Wee, chairman emeritus of United Overseas Bank, had bought the remaining unsold units at The Nassim luxury condo for $411.6 million.
While he reaped a bulk sale discount of about 18 per cent, CapitaLand avoided having to pay Qualifying Certificate (QC) penalties that would have hit $9.3 million if the 45 units had been left unsold by August.
A QC deems that developers that buy private residential land must sell all units within two years of obtaining a temporary occupation permit.
If they do not do so, they must pay extension charges pro-rated to the proportion of unsold units.
Credit Suisse analyst Louis Chua said the Wee deal, which was through the family real estate arm Kheng Leong, was a good business decision for CapitaLand.
"We believe it enables CapitaLand to de-risk its residential portfolio... while enabling it to reap a healthy profit of $161 million (from the bulk sale)," Mr Chua wrote in a report.
http://www.straitstimes.com/business/property/the-nassim-deal-a-win-win-analysts
The sale of 45 units at The Nassim (above) to Mr Wee is the latest in a series of deals that have seen developers save on paying Qualifying Certificate penalties. CapitaLand avoided paying penalties that would have hit $9.3 million if the 45 units had been left unsold by August.PHOTO: KHENG LEONG
Developer reaped profit in bulk sale, while buyer got a good discount
Lee Xin En
While developer CapitaLand had to give veteran banker Wee Cho Yaw an attractive discount when he bought 45 of its plush condominium units, analysts say it was a win-win deal for both parties.
On Monday, it was announced that Mr Wee, chairman emeritus of United Overseas Bank, had bought the remaining unsold units at The Nassim luxury condo for $411.6 million.
While he reaped a bulk sale discount of about 18 per cent, CapitaLand avoided having to pay Qualifying Certificate (QC) penalties that would have hit $9.3 million if the 45 units had been left unsold by August.
A QC deems that developers that buy private residential land must sell all units within two years of obtaining a temporary occupation permit.
If they do not do so, they must pay extension charges pro-rated to the proportion of unsold units.
Credit Suisse analyst Louis Chua said the Wee deal, which was through the family real estate arm Kheng Leong, was a good business decision for CapitaLand.
"We believe it enables CapitaLand to de-risk its residential portfolio... while enabling it to reap a healthy profit of $161 million (from the bulk sale)," Mr Chua wrote in a report.
http://www.straitstimes.com/business/property/the-nassim-deal-a-win-win-analysts
