Madison joins others in weakening market that have been put on hold
PROPERTY developer Keppel Land (KepLand) yesterday announced that it will defer the construction of its 56-unit development, Madison Residences, because of weak market conditions.
Construction of the 56-unit luxury development in Bukit Timah was originally scheduled to start last June and a preview had already been held. -- PHOTO: MADISON RESIDENCESThe project has not been launched.
Luxury condos such as the Madison have fallen out of favour in recent times as buyers turn to smaller, more affordable apartments.
Some earlier reports said 'some units' had been sold at the preview of the Bukit Timah condo for a median price of $1,801 per sq ft (psf).
However, KepLand said yesterday only one sale had been made, and that had been cancelled 'by mutual agreement'. It declined to give details.
Analysts that The Straits Times spoke to said it was not uncommon for developers to offer to buy back units sold at the preview of a project if there were changes to its development.
A search on the Urban Redevelopment Authority's website showed a single caveat lodged for a 1,776 sq ft unit at $3.1 million - or $1,745 psf - in September last year.
'Given current market conditions, there is no urgency to proceed with the construction of Madison Residences. The launch or when the construction will resume for the project will depend on market conditions,' KepLand told The Straits Times.
Construction was meant to start last June and take 21/2 years. Construction and property group KSH Holdings had won a $53 million contract from Keppel Land Realty to build Madison, it was reported.
The project consists of luxury three- and four-bedroom apartments that range in size from 1,460 sq ft to 4,000 sq ft.
Madison is the latest in a string of projects in the local property market that have been deferred in the wake of the global economic crisis.
Luxury units seem to have been hit harder, noted analysts, as buyers now prefer mass-market, lower-priced condos.
KepLand said in January that it would consider delaying the construction of some of its projects to save costs.
Some measures unveiled in January by the Government in the Budget also gave developers greater flexibility in terms of selling their residential units.
The measures include a one-year extension of the completion period for private residential projects. Also extended was the period in which developers with qualifying certificates need to dispose of all residential units, from two years to four. They can rent out unsold units during this time.
CB Richard Ellis executive director Joseph Tan said there had been examples in the past of developers offering to buy back units if there were changes to the development plans. He noted that it was also not unusual for a project to be deferred even after the preview.
In its statement to the Singapore Exchange, KepLand said the deferment is not expected to have any significant impact on the company's earnings per share for the current financial year.
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