ERA Daily Research - 19 July

Hin Leong founder O.K. Lim gets $28.5m offer for his Bukit Timah good class bungalow

The Straits Times, 17 July 2021, Sat 3:05pm

By Grace Leong

A $28.5 million offer has been made for one of beleaguered Hin Leong founder Lim Oon Kuin's good class bungalows (GCBs) now under a court-ordered asset freeze injunction, The Straits Times has learnt.

The freehold GCB in Second Avenue in Bukit Timah is one of nine properties in Singapore and Australia that are among assets frozen by the High Court to recoup US$3.5 billion (S$4.75 billion) in debt from the collapsed oil trader.

The $28.5 million offer price works out to $1,426 per sq ft (psf) on the freehold land area of 19,984 sq ft, said Mr Samuel Eyo, managing director of Lighthouse Property Consultants.

"Based on a recent offer for another GCB in Third Avenue at $1,706 psf, I believe that the offer for the GCB in Second Avenue is a reasonable price. This GCB is on a down slope, whereas the Third Avenue GCB is on a hill top so the location is better," he said.

Razer co-founder and chief executive Tan Min-Liang is in the early stage of buying a property in Third Avenue for $52.8 million, according to The Business Times. The price works out to $1,706 psf on the freehold land area of 30,954 sq ft.

This is the second attempt to sell the Second Avenue GCB. Queries to the Lim family and their lawyers at Davinder Singh Chambers went unanswered.

ST last year reported that an offer was made to buy the District 10 GCB, which is held by Lim and his wife, at $27 million. A caveat had been lodged just days before Hin Leong and its shipping arm, Ocean Tankers, filed for bankruptcy protection on April 17, 2020.

But the sale was aborted in April 2020 amid the firm's deepening financial woes.

For the current offer, ST understands that the Lim family will need to get the blessing of the judicial managers-turned-liquidators of Hin Leong, who in May succeeded in obtaining a Mareva injunction to freeze the Lim family's assets worldwide up to a value of US$3.5 billion. The Lim family may also apply to the High Court for approval of the property's sale.

Generally, if assets under the Mareva injunction are sold, the proceeds would be retained in bank accounts in the defendants' names. These proceeds will then be subject to the Mareva order, ST understands.

Meanwhile, the Court of Appeal has dismissed the Lim family's application for leave to appeal against the Mareva injunction, HSBC lawyer Moses Lin of Shook Lin & Bok told ST on Saturday.

Of the alleged US$3.5 billion in outstanding debts owed by Hin Leong to 23 banks, HSBC and ABN Amro have the biggest exposure.

According to a July 13 e-mail seen by ST, the liquidators told creditors that the Court of Appeal "accepted Drew & Napier's submissions and found that the High Court judge had not committed any manifest error in granting the Mareva injunctions and there was no basis to grant the Lim family leave to appeal against the High Court's decision".

The liquidators are represented by Senior Counsel Cavinder Bull and Mr Chia Voon Jiet of Drew & Napier.

Apart from real estate in Singapore and Australia, the Mareva injunction also covers assets including club memberships, insurance policies, shares, cash and investments.

Details of the order showed that of six properties in Singapore, three are good class bungalows in Bukit Timah and Tanglin Hill.

In addition to the Second Avenue GCB, Lim, better known as O.K. Lim, jointly owns one other bungalow with his son Evan Lim Chee Meng, and one more with his daughter Lim Huey Ching.

The remaining three Singapore properties include two condominium units in Stevens Road - one owned by Mr Evan Lim and another by Ms Lim. Another condominium in Bukit Timah had been owned by Ms Lim.

The order also covers sale proceeds after payment of mortgages if any of the properties have been sold.

The injunction, which will remain in force until trial or further order, means that the Lim family will not be allowed to dispose of or deal with their assets up to a value of US$3.5 billion, except for expenditure for living expenses and legal fees.

The order showed that the family's living expenses were capped at $10,000 a week each for the elder Mr Lim, Mr Evan Lim, and Ms Lim.

In June, the elder Lim was handed 105 additional charges of cheating and forgery. Together with the 25 forgery-related charges filed last year and in April this year, the 79-year-old former oil tycoon now faces a total of 130 charges involving US$2.7 billion in alleged fraudulent loans disbursed.

Singapore prosecutors disclosed that 16 banks in Singapore have suffered US$291.9 million in "actual monetary loss" out of the US$2.7 billion loans they were allegedly duped into extending to Hin Leong by the elder Lim.

He is accused of cheating both local and international banks to get financing by deceiving them into believing that the oil trader had entered into sales contracts with oil firm BP Singapore, according to the charges. The losses are part of a total of US$3.5 billion owed by Hin Leong to the 23 banks.


Normanton Park leads in 1H2021 sales; consultants predict new home sales to cross 10,000 this year

Edgeprop, 15 July 2021, Thu 5:21pm

By Cecilia Chow

 Based on caveats lodged, Normanton Park was the best-selling private residential project in 1H2021, selling 923 or about 50% of the 1,862 units in the development. The next best-selling project in terms of number of units sold was Midtown Modern, which moved 384 out of 558 units, or 69% of the project, in 1H2021. 

“Half of the top 10 best-selling projects in 1H2021 were located in the OCR [Outside Central Region], and we expect this sub-market to do well this year, with the new launches still to come,” says Wong Siew Ying, PropNex head of research and content. 

Launches in the coming weeks include: Pasir Ris 8, Watergardens at Canberra, and Parc Greenwich EC in Fernvale in the OCR; Klimt Cairnhill and Perfect Ten in the CCR (Core Central Region); and Bartley Vue in the RCR (Rest of Central Region). “Given the limited OCR launches recently, the new projects in Pasir Ris, Canberra and Fernvale should attract strong interest from owner-occupiers, including HDB upgraders,” notes PropNex’s Wong. 

In the first half of this year, developers launched and sold an estimated 6,085 units and 6,530 private housing units (excluding executive condos) respectively, says Nicholas Mak, ERA Realty head of research & consultancy.

1H2021’s tally is over 65% of 2020’s full year take-up, says Tricia Song, CBRE head of research for Southeast Asia. Song expects sales momentum to in the residential market to remain positive.

Meanwhile, unsold stock has declined for eight consecutive quarters to reach 21,634 units as at 1Q2021 – a new low since 4Q2017 – according to Wiong Xian Yang, Cushman & Wakefield head of research Singapore. Unsold stock was at its peak of 37,799 units in 1Q2019, adds Wong.

“With the healthy sales volumes of estimated 3,035 units sold in 2Q2021, unsold inventory is projected to continue depleting further and would approach 2Q2017 historical low of 16,929 units [based on data since 3Q2006]. This might prompt developers to ramp up on their land acquisition activities,” says Cushman & Wakefield’s Wong.

CBRE’s Song expects 2021 new developer sales to come in at around 10,000 to 11,000 units, exceeding 2020’s 9,982 units.

ERA’s Mak is even more optimistic: “In a sign that the residential property market has put the worst of the pandemic behind it, developers could sell about 11,000 to 12,000 private homes [this year],” he says. If this is achieved, it would be “the highest annual sales volume since 2013, when the government introduced two rounds of cooling measures including the Total Debt Servicing Ratio structure,” adds Mak.


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