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The Business Times, 18 Aug 04

Sentosa Cove makes it easier for foreigners
They will receive approval within two days for buying landed property in the upmarket project
By Kalpana Rashiwala

SENTOSA Cove Pte Ltd (SCPL), which is launching its second tender for land parcels today, has announced an easing of regulations for foreigners to buy landed properties in the upmarket housing district.

The fast-tracked approval within 48 hours from the Land Dealings (Approval) Unit of the Singapore Land Authority (SLA) has led some property market watchers to suggest that this could presage a similar easing of rules for foreigners to buy landed homes elsewhere in Singapore. Interestingly, though, foreigners will still need to seek approval from the LDU to buy landed properties on Sentosa Cove, signalling that the authorities are still not ready to completely free up foreign buying of landed homes.

'The approval process is probably a safety net to sift out undesirable parties from hoarding land on the island,' said Knight Frank managing director Tan Tiong Cheng. 'The new rules may be a test case and could be extended to the mainland. And who knows, in future they may do away completely with the need for foreigners to seek any approvals,' he added.

Foreigners will be allowed to buy land parcels or completed landed homes on Sentosa Cove provided the property is used for owner occupation (that is, not rented out) and they don't own more than one 'restricted residential property' in Singapore. They can also re-sell their property at Sentosa Cove to foreigners who meet these same conditions.

Under the Residential Property Act, foreigners, including permanent residents, can buy a restricted property - including vacant land, landed housing and apartments in a building that is less than six storeys - only if they have the LDU's approval. Approval is usually granted in about three to five weeks to PRs and foreigners deemed to bring some economic benefit to Singapore.

When Sentosa Cove launched its maiden tender of landed housing parcels in October last year, SLA cut the approval time to seven days to facilitate bidding. From today, this will be further compressed to within two working days. 'This is a special arrangement for Sentosa Cove. It does not apply to the rest of Singapore,' SLA's spokesman stressed yesterday.

Another initiative announced by SCPL yesterday aims at attracting foreign developers to Sentosa Cove. They will now be exempted from applying for a Qualifying Certificate and a security bond - amounting up to half the land value. The exemption will bring Sentosa Cove's sale of sites in line with land sales conducted by other state agents like the Urban Redevelopment Authority. SCPL is a fully-owned unit of Sentosa Development Corporation, which is a statutory board.

Sentosa Leisure Group's chief executive Darrell Metzger estimates that about 10 to 15 per cent of the 2,558 homes that will come up eventually on Sentosa Cove could be owned by foreigners. 'That's not a lot, just enough to add a little more character to the resort lifestyle environment here,' he said.

The sort of foreign buyers SCPL is trying to attract are not speculators looking for a real estate play but those who want the lifestyle that living on Sentosa Cove offers, he added. SCPL's CEO Bernard Kong said: 'The original strategic intent is to attract an international pool of desired owners to set roots in Singapore and stay here.'

Some analysts suggested that Sentosa Cove may have been chosen as the first district to relax rules for foreign buying to boost demand for the substantial supply eventually of 2,558 homes there. However, others said the move is probably part of a larger national strategy to draw more high net worth foreigners to settle in Singapore.

Assuming the government does not extend the relaxed rules on foreign buying of landed homes to the rest of Singapore, landed homes on Sentosa Cove should command a slight price premium over their counterparts on the mainland, suggests DTZ Debenham Tie Leung executive director Ong Choon Fah.

Another seasoned property consultant agreed, but only up to a point. 'Theoretically, with more foreign buyers chasing landed properties on Sentosa Cove, the competition should drive prices up. In reality, however, there seems to be plenty of land on Sentosa Cove,' he added.

Sentosa Cove will compete with other prestigious waterfront housing districts like Sanctuary Cove on Australia's Gold Coast and the Palm Islands resort in Dubai. Mr Metzger said Sentosa Cove compares favourably with Palm Islands as the former is a smaller and hence more exclusive development.

Sentosa Cove's latest tender is to be launched today and will close on Sept 28. It is for 11 waterway-facing bungalow plots, two terrace plots (each of which can be developed into a maximum of eight houses) and a 117,612 sq ft plot that can be developed into a six-storey condo with maximum 138 units. Mr Metzger said he expects this round to fetch higher prices compared with the first tender given the easing of rules for foreign buying, but did not give details. The land parcels will be marketed principally in the region, including Indonesia, Hong Kong, China, Thailand, Malaysia and Australia.

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