Russian oligarch suffers 50% loss on Singapore real estate sale
by Tyler Durden
30 April 2017
While the Canadian housing bubble—driven by Chinese hot money—continues
to grow (although its latest near-death experience courtesy of Home
(Lack of) Capital Group may have finally pierced a stake through its
heart), housing markets elsewhere are suffering from some serious
wobbles. Take Singapore, for example, where recently a 4,069 sq ft at
Seascape in Sentosa Cove was sold at a $6.6 million loss. The loss
works out to 52% or 10% annualized over a holding period of 6.6 years.
The unlucky seller: a Russian oligarch. According to The Edge Property,
the previous owner, a Russian national bought the unit from the
developer at $12.8 million or $3,146 psf in June 2010. The unit was put
up for mortgagee sale at an auction conducted by JLL in January 2017 at
an opening price of $6.8 million but did not find a buyer. It was
subsequently sold at $6.2 million or $1,524 psf by private treaty.
According to JLL head of auctions Mok Sze Sze, the buyer is an investor.
It's not the first dramatic repricing of Singapore real estate. So far,
four other private non-landed homes have been sold at losses above $5
million, based on the matching of URA caveat data as at Feb 17.
Previously, a 4,133 sq ft unit at Seascape was sold at a $5.2 million
loss. The unit was bought at $11 million or $2,661 psf in December 2011
and sold at $5.8 million or $1,403 psf. The loss works out to 47% or
17% annualized over a three-year holding period. The seller was also
liable for a 4% or $232,000 Seller’s Stamp Duty.
Before that, a 3,757 sq ft unit at St Regis Residences Singapore in
prime District 10 was sold at a $5.02 million loss. The unit was bought
at $13 million or $3,461 psf in July 2007 and sold at $7.98 million or
$2,124 psf. The loss works out to 39% or 24% annualized over a 1.8 year
In September 2001, two separate 8,740 sq ft units at Ardmore Park in
prime District 10 were sold at losses of $8 million and $5.5 million.
The larger loss accrued to the unit bought at $18.5 million or $2,117
psf in Feb 2000 and sold at $10.5 million or $1,201 psf. The smaller
loss accrued to the unit bought at $16 million or $1,831 psf in
December 1999 and sold at $10.5 million or $1,201 psf.
While it remains unclear who the "motivated" Russian seller was, or
what prompted him to rush with the fire sale, it is notable that in at
least some occasions, price discovery under liquidity duress results
in market clearance as much as 50% below suggested "fair values."
may also explain why in its rescue loan to Canada's biggest alternative
lender, HCG, the provider of $2 billion in rescue financing, the Canadian
Healthcare of Ontario Pension Plan, demanded $2 worth of collateral
coverage for every $1 it lends, a hint that losses as great as 50 cents
on the dollar may be imminent if and when the Canadian housing bubble
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