Published May 5, 2009

China investor sells 19 units at Fernhill

Price said to be about $1,180 psf, which puts it below the purchase price

By KALPANA RASHIWALA

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THE China buyer who failed to make outstanding payment to MCL Land for 20 units at The Fernhill when the project received its Temporary Occupation Permit recently has sealed a deal to sell 19 of the units.

The Fernhill: Developer MCL will book profit on units involved in Q2 if it receives payment from Concordia by May 26

MCL Land in its filing with the Singapore Exchange yesterday did not give the price fetched by the China investor Concordia Overseas Pte Ltd, which MCL did not identify in its statement.

However, BT understands the price was about $1,180 per square foot, below Concordia's purchase price.

The Fernhill is a five-storey freehold project with a total of 25 units at the corner of Orange Grove and Fernhil roads. Concordia Overseas, controlled by Hong Kong resident and Singapore PR Chan Ki, had bought all 25 units on a deferred payment scheme (DPS) from MCL in January 2007 for $1,410 psf, paying an initial 20 per cent of the purchase price to MCL. Concordia later subsold five units to foreigners at an average price of about $2,200 psf, leaving it with the remaining 20 units.

Some sources were surprised that MCL's statement yesterday indicated that Concordia had sold only 19 units. They had learnt that Concordia inked a sale and purchase agreement late last week to sell all its remaining 20 units to a group of local investors and the lumpsum investment was said to be about $39 million.

'The units may have been sold individually, with each investor in the group taking a few units,' a property industry observer suggested.

The completion of the sale of the apartments by Concordia to the new buyers is slated to take place ahead of the expiry on May 26 of a 21-day notice that MCL will serve today to treat its sale and purchase agreement with Concordia as having been repudiated by the latter.

This was after Concordia failed to pay up an outstanding amount - equivalent to 65 per cent of its purchase price on the 20 units - by yesterday, 14 days after the due date for the payment.

If Concordia manages to pay up by May 26, MCL cannot forfeit the 20 per cent of the $1,410 psf purchase price that it collected from Concordia back in 2007, and re-sell the units. The Hongkong Land subsidiary will then recognise the revenue and profit from the sale of the units in its second quarter results.

Going by information in its Q1 results statement last week, it should be able to book US$31 million in revenue and US$9.3 million net profit on the 20 units in its Q2 results.

In its Q1 results statement last week, MCL Land said that for The Fernhill, it booked profit on only five units for which it received the outstanding purchase price by the payment date.

BT reported earlier that the buyers of these five units had picked up their units in the subsale market from Concordia at an average price of nearly $2,200 psf. MCL did not extend DPS to these subsale buyers.

While Concordia will be incurring a loss from the subsale of the 19 units, it reaped handsome gains on the five units it subsold back in 2007.