Big-name investors snap up loss-making luxury homes from weary sellers

Big-ticket sales amounted to $546.6m in Q4.

Policy-battered property sellers are choosing to relinquish more of their loss-making luxury developments to big-name investors. A report by Colliers revealed that sales stemming from strata-titled residential units worth upwards of $5.00 million amounted to $546.55m in Q4, higher than the amount garnered from such sales for the past three quarters of 2013.

The figure was boosted by two bulk purchases of luxury residential flats by The Blackstone Group, a private investment banking firm based in the United States.

The group bought 18 four-bedroom units at the Paterson Suites, a luxury development on Paterson Street. The purchase was sealed for around $83m, or $2,100 per square feet.

“The luxurious residential units, which received their Temporary Occupation Permit in 3Q 2013, were offloaded by a fund in the Real Estate Capital Asia Partners (Recap) series managed by SC Capital Partners who bought the properties in 2010 for about $2,700 per sq ft,” the report stated.

The Blackstone Group also acquired the entire 34-unit 21 Royal Oak Residence located on Anderson Road for $164.00 million or about $1,900 per sq ft from Arch Capital, who paid $2,100 per sq ft in 2010 for the 10-storey property.

"The conclusion of the two sales manifested the setting in of seller’s fatigue amid the prolonged down cycle in the luxury residential segment, where the price gap between buyers and sellers is narrowing, as the latter are increasingly more willing to negotiate," stated Colliers.