http://www.themalaysianinsider.com/index.php/bu…
SINGAPORE, April 6 – It was supposed to be
Asia’s answer to glitzy Monaco, but plans to remake Sentosa into an
island playground where rich foreigners and locals live and play
are going to take longer than expected to materialise.
While key hotel projects and the Resorts World at Sentosa
integrated resort are largely on schedule, things are not going as
well at Sentosa Cove, the stretch of land on the island set aside
for mainly residential use.
The plan was for some 2,500 oceanfront villas, waterway
bungalows, hillside mansions and upscale condominiums to be built
on the 117-hectare site. Earlier projections were that the bulk of
the new homes would be ready by 2010.
But industry sources now say fewer than 1,000 homes are likely
to be completed by the end of this year, and several developers are
expected to delay their projects further.
City Developments, for example, has postponed its $580 million
project comprising luxury apartments, shops and a five-star,
320-room Westin Hotel, originally slated to open this year.
One problem is that sales and prices of new homes on the island
have dropped sharply in the last two quarters, exacerbated by the
number of foreigners leaving Singapore.
Sentosa Cove was popular with foreigners as they could get
permission to own land there with relative ease.
“The bulk of purchasers of luxury homes, both on the mainland
and on Sentosa, were foreigners,” said Tay Huey Ying, director for
research and advisory at Colliers International.
Colliers’ data, based on caveats lodged, shows that only one
non-landed residential unit in Sentosa was sold in Q4 2008. In the first three months of this year, the
number rose slightly to eight.
This is a far cry from transaction volumes at the height of the
property boom in 2007. In Q1 2007, some 279
non-landed homes were sold in Sentosa. In Q2 that year, the
transaction volume was 243.
Prices have also come down. Colliers’ data shows that the
transacted price of non-landed properties at Sentosa Cove averaged
$1,318 per square foot (psf) in Q1 2009 –
down 45.8 per cent from the peak average of $2,431 psf recorded
exactly one year ago in Q1 2008.
It should be noted, however, that these averages are based on
small transaction volumes of eight units for Q1
2009, and 33 units for Q1 2008.
Occupancy levels are low too. Even for properties that are
completed and fully sold, not every unit is occupied, said Nicholas
Mak, director of research and consultancy at Knight Frank. At the
fully sold The Berth by the Cove, which obtained its temporary
occupation permit in 2006, occupancy is at 93-94 per cent, but
market watchers say islandwide, the occupancy levels are much
lower.
The picture is, however, somewhat brighter for other new and
upcoming developments on the island.
Luxury hotel Capella Singapore, which opened its doors last
week, is seeing strong demand – despite the fact that room rates
start at $750.
“Response in our first week has been very positive, with an
average of about 70 rooms per night,” revealed general manager
Michael Luible. The hotel has 111 rooms.
Luible acknowledged that the hotel would not escape the effects
of the economic slowdown, but pointed out that its guests are high
net worth individuals who will continue to travel.
“We will, of course, monitor the economic situation carefully
and plan our strategies accordingly,” he added.
Resorts World at Sentosa remains on-track for its soft opening,
which will see Universal Studios, four of its six hotels as well as
the casino ready in Q1 2010.
The four hotels – Hotel Michael, Maxims Tower, Festive Hotel and
Hard Rock Hotel – will add about 1,350 rooms to Singapore’s
inventory. The rest of the resort, which includes a spa and
Maritime Museum, will open progressively thereafter.
Indeed, hopes are now pinned on the integrated resort which is
designed to draw in visitors.
According to Suzanne Ho, deputy director of communications for
Sentosa, foreign visitor arrivals have dipped since last September,
in line with the downward trend of tourist arrivals into
Singapore.
The lower visitor numbers are affecting food and beverage
operators adversely. Ken Hasegawa, manager of Japanese restaurant
Si Bon, reckoned that revenue has fallen by about 20 per cent
recently.
Similarly, at Cool Deck, a bar along Siloso Beach, business is
slow. Selina Huang, Cool Deck’s assistant manager, attributed the
decrease to falling tourist arrivals. Just three months ago, close
to 90 per cent of the bar’s clientele were tourists, most of whom
stayed at the Rasa Sentosa Hotel. Now, only 40 per cent of patrons
are tourists, she noted.
The decrease in demand is prompting some outlets to modify their
pricing. Even il Lido Italian Restaurant has cut prices by about 20
per cent on average in response to a 40 to 50 per cent decrease in
revenue over the past three months. Its seven-course meal now costs
$120 instead of $180, and it has removed some expensive items –
such as truffles and caviar – from the menu. – Business Times
Singapore
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