It is in no rush to launch Ardmore Park sites despite softening market
PROPERTY developer Wing Tai Holdings is in no hurry to launch the two sites it owns in the prestigious Ardmore Park area: the Ardmore Park condominium and Anderson 18.
Wing Tai chairman Cheng Wai Keung said yesterday that although home prices are softening, he expects them to remain mostly stable until at least 2010.
Units at Anderson 18 are being rented out as redevelopment is on hold. -- PHOTO: KNIGHT FRANKThis is because projects that are being completed this year and next were originally sold at relatively low prices in 2005 and 2006, so there is no urgency for buyers of these projects to unload their units.
'Developers are also quite strong financially, so if they can hold and allow the orderly release of units, I do not see prices dropping drastically,' he told reporters and analysts at the release of Wing Tai's full-year results.
Beyond 2010, however, the situation may change. Projects to be completed then were launched at 'very high prices' last year, and if the economy does not improve by then, these expensive apartments may flood the market while financially strong developers will probably also weaken, Mr Cheng said.
But he added that while prices have softened, it is not because Singapore's economic fundamentals have worsened but rather because 'traders', or speculators, have left the market. 'I maintain that fundamentals are sound,' he said.
In fact, Mr Cheng said he is prepared to hold out for prices to reach $4,000 per sq ft (psf) again at Ardmore Park. 'Even at the peak, when they were talking about $4,000 psf, I still think that was relatively cheap, compared to values in the world and in Singapore.'
He added that Wing Tai owns two of the three sites to be launched in the Ardmore Park area. SC Global has the third, The Ardmore. 'We are the ones who will set the price; if we never lower prices, how can it lose value?'
For now, Wing Tai has already locked in construction costs for Ardmore Park and is renting out the units in Anderson 18 rather than tearing down the building for redevelopment.
In the meantime, the developer may launch some of the other sites in its land bank this year or next, said Wing Tai's chief operating officer Tan Hwee Bin.
Belle Vue Residences in Oxley Walk will be launch-ready next month, while a 99-year leasehold site in Alexandra Road near the Redhill MRT Station will obtain all the necessary approvals by the year end.
Ms Tan said the group will position the Alexandra Road condo as a mid-tier project minutes away from Orchard Road, and may bring to it some of the features it has used in its high-end Draycott8 development.
For the past year, slower home sales have taken their toll on the performance of the property and retail group.
Wing Tai's fourth-quarter net profit fell 60 per cent to $96.3 million, dragging down full-year net profit 40 per cent to $229.4 million. Revenue more than halved both in the fourth quarter, to $107.3 million, and in the full year, to $428.2 million.
Earnings per share dropped to 30.11 cents for the year to June 30, from 53.12 cents the previous year. Net asset value per share slipped to $2.03 as at June 30, from $2.07 a year ago.
Wing Tai is proposing a dividend of six cents per share for the year, comprising a first and final dividend of three cents and a special dividend of three cents.
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