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Chitchat Wee cho yaw buys 45 unsold condo units at discount...

sinkiezen

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Banker Wee Cho Yaw buys all 45 unsold units at The Nassim for $411.6m

One of Singapore's richest men, veteran banker Wee Cho Yaw, has bought all 45 unsold units at upmarket condominium, The Nassim, for $411.6 million.

The bulk sale gets developer CapitaLand off the hook over penalties that apply to unsold properties after a stipulated period. The penalties could have run to millions of dollars.

Mr Wee, chairman emeritus of United Overseas Bank, bought the properties through his family's private real estate arm, Kheng Leong.

The deal values the property at $407.2 million, or $2,300 per sq ft.

CapitaLand said the agreed property value represents a bulk sale discount of about 18 per cent on the current individual unit sale price.

This is in line with a range of discounts seen at recent bulk sale transactions, such as the 156 units sold at Nouvel 18 at a discount of about 16 per cent, as well as the 30 units sold at iLiv@Grange with 23 per cent off.

The 45 units at The Nassim make up a strata area of 16,446 sq m, and was sold by CapitaLand subsidiary CRL Realty, which owns the property developer Nassim Hill Realty.

Other individual buyers have snapped up 10 units in the property at 18, Nassim Hill, which features 55 units in eight five-storey blocks.

It was previously reported that some of these buyers include Mr Sigid Wonowidjojo and his relative. Mr Wonowidjojo's family controls Indonesian cigarette maker Gudang Garam.

Of the 45 units purchased by Mr Wee, three are five-bedroom units, and 16 are four-bedroom units. The remaining 26 are three bedders.




http://www.straitstimes.com/business...ime=1484612570
 

krafty

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soon he will be kicking the bucket......... how much can he bring along even with special permit???

i reckon he is trying to stimulate the confidence in the property market. he and old man are buddies, he also will not want to see sinkieland fail. rich and successful elderly like him, tend to be touchy-feely. this is rather an emotional decision than an investment decision.
 
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Papsmearer

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The whole truth is not revealed in this piece of fucked up reporting by the Shit Times. This Capitaland project was an unmitigated disaster for Capitaland. It has been completed since at least the middle of last year and only sold 100 lousy units out of 55. Wee did them a favour by taking this dog off their hands and overpaying for it.

This article by Shit Times is misleading because Wee's family property arm Kheng Leong did not actually buy the 45 units. They bought NRH which is the developer 100% owned by Capitaland, and this developer is the one who holds the 45 units. Its a straight stock purchase from Kheng Leong of all the shares for NRH. The valuation of $407 million for the 45 units is just for wayang and accounting purposes for the transaction. In truth, because they cannot even be sold now on the market at that price of $2300 psf, a more realistic market appraisal should be in the low $2000 PSf or high $1800-$2000 psf range. Which would value these properties at substantially less then $2300. In other words, if the market value of these properties is really $2300, they would have been selling. But there were no sales at all, forcing Wee to buy the balance. Lets say NRH dropped the price to $1900 psf, would there have been buyers? If yes, then we have to say the appraisal should have been for $1900 psf and not $2300 psf.

But I digress here. When someone buys a company like NRH, not only is there the 45 units that it owns on the books. But the company will have other assets. Maybe vehicles for its execs, maybe it owns it own office space, maybe it owns some cash and receivables in its banking account, maybe it owns some construction equipment, etc. It turns out that these other tangible assets were valued at $138.7 million. So not only is Wee getting 45 units at $411.6 million, he also picks up $138.7 million on other assets. hence, this reduced his investment to $272.9 million. Likely, he would have liquidated all the tangible assets of the NRH after the purchase, and use the $138.7 million to pay down the cash of $411.6 million that he paid. This sale also says that he has to assume a $272.9 million of a shareholders loan that Capitaland made to NRH. Wow, what a coincidence. this $272.9 million shareholders loan that he has agreed to take over is the exact same amount that of his cash outlay. Hence making the total cost to him of $545.8 million. Half of which he paid in cash, and half in the form of a loan from Capitaland at I am sure favourable rates.

So, based on this transaction, the total price for Kheng Leong came up to $545.8 million or $3083 psf. Of which they only put down 50%, with the other 50% carried by the prior owners in the form of a shareholder loan. My calculations could be wrong, but maybe someone can confirm it.
 

Papsmearer

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Generous Asset
The sale of Nassim Hill Realty was satisfied entirely in cash, said CapitaLand.

CRL Realty, a wholly-owned subsidiary of property giant CapitaLand, has sold its 100 percent stake in Nassim Hill Realty (NHR) to Kheng Leong Company for $411.6 million.
In an SGX filing on Monday (16 January), CapitaLand revealed that NHR was responsible for developing The Nassim, a luxurious low-rise condominium located along Nassim Hill in District 10. It presently owns 45 units in the freehold property.
The consideration, which was satisfied entirely in cash, is subject to post-completion adjustment and comprises the estimated net tangible assets value of $138.7 million as at 16 January 2017.
It also takes into account the $407.2 million agreed property value for the 45 units in The Nassim, as well as an assignment of a $272.9 million shareholder’s loan.
Based on CapitaLand’s unaudited consolidated financial statements for the nine months ended 30 September 2016, and assuming the sale was effected on 1 January 2016, CapitaLand’s earnings per share would have increased from 17.9 cents to 21.7 cents.
However, assuming the sale was effected on 30 September 2016, the financial impact on CapitaLand’s net tangible asset per share would not be material.
 

frenchbriefs

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Asset
Haha estupidos,now all the real estate tycoons are buying their own unsold condos left and right bulk sale in order to keep the market afloat and screw the small buyers,how long can they keep up this charade.might as well ask temasek holdings join in the fun.they better come up with more fake news that Donald Trump and bill gates is staying at nassim Jade otherwise no buyers.

No wonder PAP cannot send the PRCs home,, otherwise housing market collapse and Singapore become ghost city.
 
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no_faith

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Asset
Haha estupidos,now all the real estate tycoons are buying their own unsold condos left and right bulk sale in order to keep the market afloat and screw the small buyers,how long can they keep up this charade.might as well ask temasek holdings join in the fun.

No wonder PAP cannot send the PRCs home,, otherwise housing market collapse and Singapore become ghost city.

Temasek holding is waiting the fun for US call to buy up US debt ridden company.
Temasek gambling overseas.
 

virus

Alfrescian
Loyal
the hum burger is buying to support property price, not some gallant act.

imagine the amount of tax he has to pay for 45 units unsold run into tax losses of more then 15 mil easily which is now absorbed into the sales price. and for condom, he can convert to serviced apartment to have some regular income unlike landed properties which cannot be done that way because no one will buy landed properties others used for interim rental.
 

Rogue Trader

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Asset
...
imagine the amount of tax he has to pay for 45 units unsold run into tax losses of more then 15 mil easily which is now absorbed into the sales price....

The tax penalty on unsold properties is a bullshit ruling which developers easily bypass by selling to affiliated shell companies. But capitaland is indeed in choppy waters due to undersold and overpriced projects like the soon-to-TOP Sky vue in bishan.

I don't know about their golden eggs in China but given the recent diplomatic spat with president Xi , any strange thing might come up soon
 

Papsmearer

Alfrescian (InfP) - Comp
Generous Asset
Haha estupidos,now all the real estate tycoons are buying their own unsold condos left and right bulk sale in order to keep the market afloat and screw the small buyers,how long can they keep up this charade.might as well ask temasek holdings join in the fun.they better come up with more fake news that Donald Trump and bill gates is staying at nassim Jade otherwise no buyers.

No wonder PAP cannot send the PRCs home,, otherwise housing market collapse and Singapore become ghost city.

Wee is not buying his own condos. He is buying it from Capitaland which is a GLC and not owned by him.
 

Papsmearer

Alfrescian (InfP) - Comp
Generous Asset
The tax penalty on unsold properties is a bullshit ruling which developers easily bypass by selling to affiliated shell companies. But capitaland is indeed in choppy waters due to undersold and overpriced projects like the soon-to-TOP Sky vue in bishan.

I don't know about their golden eggs in China but given the recent diplomatic spat with president Xi , any strange thing might come up soon

Actually, if you think about it, the report by SHit Times makes no sense. The QC penalty is applicable on foreign own development companies or on JVs with a foreign developer. In this case, Nassim Hill Realty is 100% own by CRL which is 100% owned by Capitaland, a SIngapore company. The project does not appear to fit into this penalty case, as Nassim Hill did not take on a foreign JV partner. And even if they had to pay the penalty, how much can it be? $10-$15 million at the most which is a small fraction of $400 million. The fact is that Capitaland do not see better prospects for the property market in the short to intermediate term and are bailing out. and if you sell to an affiliated company, you still have to pay the penalty.
 

frenchbriefs

Alfrescian (Inf)
Asset
Wee is not buying his own condos. He is buying it from Capitaland which is a GLC and not owned by him.

If u read the article he's not the only case,they are bulk saleling these unsold condos left and right.most of Singapore's billionaires come from real estate,as far as I'm concerned he's probably another one of those honchos.now they are desperately trying to prop up the oversupplied market.These sinkie billionaires,their great grandfather was probably highly successful businessmen with lots of cash flow,so they plunk down their money every year in real estate cause Chinese people love real estate,they do these for 20,30 years then pass down all their property to the grandfather and the grandfather do the same accumulate more property and pass down to the Father.now Singapore real estate is like a huge bubble slowly growing over the past 70 years,by the time the father receive the portfolio of properties it's probably already worth hundreds of millions,by the time it reaches the son they are both billionaires.....Singapore is like a island of old money,all the aristocrats and royal families who control this island.all the Ongs,and Bengs and Lengs .Not many new money or entrepreneurs,
 
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Papsmearer

Alfrescian (InfP) - Comp
Generous Asset
If u read the article he's not the only case,they are bulk saleling these unsold condos left and right.most of Singapore's billionaires come from real estate,as far as I'm concerned he's probably another one of those honchos.now they are desperately trying to prop up the oversupplied market.These sinkie billionaires,their great grandfather was probably highly successful businessmen with lots of cash flow,so they plunk down their money every year in real estate cause Chinese people love real estate,they do these for 20,30 years then pass down all their property to the grandfather and the grandfather do the same accumulate more property and pass down to the Father.now Singapore real estate is like a huge bubble slowly growing over the past 70 years,by the time the father receive the portfolio of properties it's probably already worth hundreds of millions,by the time it reaches the son they are both billionaires.....Singapore is like a island of old money,all the aristocrats and royal families who control this island.all the Ongs,and Bengs and Lengs .Not many new money or entrepreneurs,

Please lah, sinkie billionaires are already all very diversified out of zikapore. U think they continue to buy here to pass on to their heirs. LOL. Most have made their original fortunes in zikapore but its getting very hard to do large projects in zikapore. The local development market is populated by large GLC players like Capitaland and then have to fight with China developers and Indon developers. There is only so much land to go around in zikapore and all the big boys fighting over land parcels does not equate to big profits. Most if not all the top families are diversified out long ago. The Tangs (of CK Tang) have a hotel chain in New Zealand. Other families are in Australia, i know of one billionaire family that own over 300 landed properties in Singapore, but even they are now in US and canada buying and developing properties. Other families own a luxury hotel portfolio in the US, while others are in Malaysia, Indonesia. etc. No one passes property down from generation to generation, they now own holding companies with cross ownerships in many other companies that hold different properties. The only thing they pass on is shares in the holding company.

U think a shrewd businessman like Wee don't have better and more profitable places to park $400 million other then in 45 overpriced, unsellable condos? More likely he did a favour for the daughter in law of his good friend and golfing partner Old fart. Later on when URA auctions a parcel of land, his development company will suddenly be awarded the winning bid. U scratch my back, i scratch your back. take a loss on the Nassim transaction for the 45 units and make it back later on when URA awards you the bid.
 
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