As per the recent reports, Shun Tak Holdings which is a listed company in Hongkong has withdrawn its enbloc deal with a leasehold private property named High Point just within one month after announcing its acquisition. The news updates show that Shun Tak has fortified the $1million tender deposit by now and it is probably the first company to suffer such a loss due to collective sales in the real estate market after the implication of the latest cooling measures from the government.
It is important to mention that Shun Tak, on December 9, announced about becoming a fully owned subsidiary with the new name – Shun Tak High Point, after successfully winning their bid on the High Point condominium with the estimated price range of $556.7 million.
This was the fifth successful property acquisition of the group within the past five years in Singapore. High Point is situated at the Prime District 9 and is situated along 30 Mount Elizabeth. The overall site area for this Singapore condominium is approximately 4,422.7 square metres with a maximum gross floor area of 21, 071.8 square metres.
Real estate company, Savills revealed that the land bid price for the famous High Point site was almost $2537 per square feet ppr. It also includes the development charge of around $18 million. With these price estimates, it turned out to be the highest land price psf ppr deal since July 2018. Moreover, it is the third-highest deal in the history of Singapore.
A few days ago, Shun Tak stated that they had planned the redevelopment of this old property into a top-rated, luxury residential development, and it was expected to complete by 2027.
In another statement, the managing director and executive chairman of Shun Tak, Pansy Ho, said that this property acquisition in Singapore will help them in the future expansion of their foothold and portfolio in Singapore. The teams also believed that it will bring them new opportunities to lead vibrant development with unique and top-quality elements in the city.
The news about the withdrawal of Shun Tak from this recent deal came out just within one week after Singapore implemented the latest cooling measures. It also includes the rise of additional buyer’s stamp duty rates from 5% to 15% for all the entities other than permanent residents and citizens of Singapore that are planning to buy their first property.
Other than this, the remittable amount of additional buyer’s stamp duty for residential developers was also increased from the existing 25% to 35%. It clearly means that if developers fail to finish the project within five years and could not sell it within this prescribed time limit from site acquisition, they may be liable for paying 35% additional buyer’s stamp duty along with interest. Note that developers are also liable to pay 5% non-remittable additional buyer’s stamp duty.
Observations state that the new cooling measures have made developers more selective and cautious about their collective sale site investment decisions.
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