See how 2-year sales of OUE’s Twin Peaks has been a disappointment
Only 49 out of 462 units were sold since May 2010 launch, probably why OUE joined appeal to extend the 2-year period of selling remaining units upon TOP.
Twin Peaks may be subjected to the Qualifying Certificate (QC) requirements under the Residential Property Act (RPA), stipulating TOP typically within 5 years and sale of all units two years after TOP, said MayBank KimEng.
"We understand that OUE inked the conditional deal to buy the former Grangeford site at SGD1,810 psf in 2007. TOP for Twin Peaks is currently scheduled in Feb 2015. Breakeven for the project is SGD2,904
according to our estimates," MayBank KimEng analyst Ong Kian Lim said.
"According to SLA, the penalty is either 10% of land cost or paying the extension premium of 8%, 16% and 24% of the land cost for the first, second and third extra years respectively. The amount is pro-rated
based on the proportion of unsold units," he added.
According to Ong, during the analyst briefing on Aug 8, 2012, OUE mentioned that it has joined REDAS in its appeal to the Ministry of Law for an extension. The Ministry of Law has said in a statement that it
was ‘considering the feedback’ from REDAS. The appeal is still pending.
Moving forward, management, he said, stated that it will keep its residential exposure to not more than 20% of asset value.