Managing Asia

Managing Asia

Singapore's luxury housing market remains firm

Reporting by Christine Tan | Written by Saheli Roy Choudhury
How's Asian luxury real estate coming along?

Demand for high-end homes in Singapore remains firm despite the levying of duties aimed to cool the once-runaway market, according to one local developer.

The Additional Buyer Stamp Duty (ABSD) is a levy that places disproportionately higher premiums for non-Singapore citizens when purchasing residential properties in the city-state. In addition to the basic stamp duty paid by all buyers, foreigners pay additional 15 percent in stamp duty. Permanent residents of Singapore pay 5 percent additional stamp duty on their first property and 10 percent for subsequent ones.

Ong Chih Ching, executive chairman of KOP, told CNBC's "Managing Asia", "We are talking about 8 to 10 million [Singapore] dollar ($5.59 to 6.99 million) properties, so that's a lot of money [in additional stamp duty], that's more than enough for renovation."

But Ong added that if the government decides to lift the additional stamp duty in Singapore's property market, there will be a rush to buy homes. "I will sell at least half of my stocks overnight."

This is because property owners view Singapore as a global city and a haven in a world fraught with mounting geopolitical tension and financial turmoil.

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Singapore is "a city that people want to live in at least for the next ten years," said Ong. "That means our real estate, especially the luxury segment, will definitely come back." She reckoned it will take another two to three years for it to get back on track.

KOP is a Singapore-based real estate and hospitality company with a portfolio of high-profile projects, worth as much as S$3 billion ($2.09 billion), that include the Ritz Carlton Residences and Hamilton Scotts, where flats come with personal garages. Since starting operations 10 years ago, the company has also acquired luxury boutique hotel chain Franklyn Hotels & Resorts, Nongsa and Montigo Resorts in Batam, Indonesia, and was part of a consortium that acquired Prudential Tower in Singapore.

One of KOP's early investors was the Emirati-based Dubai Investments Group.

"At that time, [KOP] was three years old, so we were actually raring to do deals," said Ong. But it did not turn out to be a smooth ride.

Because Dubai Investments Group was the majority shareholder, every acquisition or business deal KOP wanted to make required their approval. "But the thing is," said Ong, "everything was delayed. We did not do deals for two years and I think it's probably the worst two years I have ever had."

Since then, Ong made a management buyout of the 51 percent stake Dubai Holdings held in KOP. "I didn't negotiate [on the buyout price]. I just said okay because freedom has no price."

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Ong was a practicing lawyer before she became an entrepreneur. She credits her large family with honing her business acumen. She graduated with a Bachelors degree in Law from the University of Buckingham and worked a lawyer, specializing in corporate and real estate transactions. She is also a founding partner of Singapore-based law firm Koh, Ong & Partners.

Between 2014 and 2015, Ong was named one of 50 Power Business Women in Asia by Forbes magazine and was awarded outstanding entrepreneur at the Asia Pacific Entrepreneurship Awards in 2014.

But in a stark contrast to most entrepreneurs, Ong described herself as risk-averse. "I don't like it all," she said. "People thought I like taking risks but actually, I don't." Which is why she meticulously puts together one back-up plan after another for every project she undertakes.

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Perhaps her boldest project to date is a 9 hectare indoor winter resort in Shanghai due to be completed in 2019.

"I don't know anything about building an entertainment complex," Ong admitted. "But the thing is I did not know how to build a 36-storey building [either]. I do not know how to do a lot of things, but my strength is that I have the ability to get the right people [for the job]."

The Shanghai Winterland is set to have an indoor ski resort, an ice hotel, theaters and retail outlets, as well as Olympic-grade winter sports facilities. The project has an estimated building cost of 3 billion yuan ($455.89 million), minus land costs, and KOP has secured partnerships with Chinese developers Shanghai LuJiaZui and Shanghai Harbour City Development.

As for her next grand idea, Ong is looking into building a self-sufficient urban housing project she aptly called "Noah's Ark". The community will supposedly have farming facilities, as well as recycling of water and energy. "You don't have to get out of the building for 18 months or more because you [will] have your own fish, your own plants, vegetables, and so on."

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