Developers narrowly escaped hefty penalty

Mr Wee Cho Yaw purchased units at The Nassim

The Chairman of United Industrial Corporation (UIC) and United Overseas Bank (UOB), Mr Wee Cho Yaw, has bought about 45 of the unsold units in an upmarket Singapore condominium, The Nassim. The total paid price of this property is $411.6 million. Mr Wee who is one of the wealthiest businessman in Singapore has bought this property through Kheng Leong Co (Pte Ltd), another property company lead by Mr Wee and his family.

 

This bulk sales could have gotten developer CapitaLand off the hook due to the Qualifying Certificate (QC) penalties attached to it. The amount of these penalties could have reached to millions of dollars if Mr Wee does not focus on it.

According to the deal, the value of the property is $407.2 million that makes it $2,300 per square feet. As explained by CapitaLand, the current value of the property i.e. the prices on which it is sold is sufficient to represent a bulk of sale discount. This discount can be calculated as approximately 18 percent if compared with the value of single unit’s sale price.

The Nassim
The Nassim

 

The details of this project are explained below:

• Name of Project: The Nassim
• Address: Nassim Hill
• Name of Developer: CapitaLand residential Singapore pte ltd
• Total number of units: 55 residential units, 6 storeys tall
• Size of the land: 125,566 sq ft
• Archeitect: Mok Wei Wei

 

It is calculated that the 45 units at The Nassim will make up a total of 16446 sq metre strata area. Apart from the units that Mr Wee purchased, the first 10 units sold in the property was purchased by Indonesian, Mr Sigid Wonowidjojo and his relatives. Mr Sigid Wonowidjojo and his family run the Gudang Garam Group which is an Indonesian cigarette making company.
The remaining 45 units that are being purchased by Mr Wee includes three to five bedroom units. This deal is considered to be the latest one in the bulk of sales that have been carried out in the residential units sectors in Singapore. These are specifically the ones that are done to avoid the QC penalties.
It is clearly stated in Singapore’s residential property act that after acquiring a residential land parcel for residential development, developers are required to finish building their projects within the time period of five years. Upon obtaining the temporary occupation permit (TOP) for the developments, developers have to ensure that they sell the units within 2 years from the TOP date. Failure to do so will lead to the QC charges being imposed on them.

 

For The Nassim, it was estimated that CapitaLand might have to pay a penalty of up to $9.3 million if they fail to sell the units in the first year. The amount could have skyrocketed all the way to $47.9 million if the units are still not sold in the third year.

 

Visit http://www.straitstimes.com/business/wee-family-buys-all-45-unsold-units-at-the-nassim for more details.

 

 

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