Announced on Monday (16 January 2017), property developers CapitaLand have officially offload 100% ownership of its luxury residential project, The Nassim – which was held under Nassim Hill Realty to Kheng Leong (also developers of Principal Garden) for a whopping $411.6 million (SGD) or $2,300 per square foot.
The deal saw the development company changed hands, together with the sale of 45 unsold residential units within The Nassim – a freehold condominium project situated at Nassim Hill. The project has only managed to sell 10 units since the year 2015.
The project is subjected to the QC (qualifying certificate) condition to sell all of its units within 2 years from obtaining the Temporary Occupation Permit (TOP) in August 2015.
By concluding this sale, CapitaLand will be able to avoid incurring extension charges which was supposed to kick in from August this year – an amount which works out to be approximately $9.3 million (to obtain another 1-year extension of the deadline).
Should the developer require to extend the deadline further after the 1st year, the extension charges may work out to as much as $18.6 million and $27.9 million for the 2nd and 3rd year respectively – assuming the number of unsold units remains unchanged.
Numerous property developers have been concluded such bulk sales for the unsold units within their projects in order to get away with the extension charges.
Another significant deal saw City Developments Ltd (CDL) acquiring 50% stake from Wing Tai for its 156 unsold units in Nouvel 18, for $411 million in October 2016 and subsequently sold the entire project to a group of high net-worth investors via a profit participation securities (PPS) platform for $977.6 million.