Normanton Park hit with ‘no-sale licence’ – what it means for the developer

Approximately around 1,900 units, newest property development which is formerly known as Normanton Park en bloc area and so far one of its largest residential developments introduced in 2019.  This is second only to Treasure at Tampines which holds 2,203-units, this is considered the grandest & biggest private condominium for entire Singapore until to date and this was launched previous month.

However, Normanton Park’s recent launch would likely be delayed. Last January of 2019, the COH or Controller of Housing, blundered the famous developer Kingsford Huray Development over a no-sale licence because the company was not able to comply with the requirements set for a sale licence, explained by the spokesperson of Urban Redevelopment Authority (URA).

“When doing an assessment on the application for HDL or Housing Developer’s Licence, the COH will look on different factors such as the track record, told by the spokesperson of URA. When needed, the COH can provide a licence stipulating some conditions that guarantee the interests of property buyers are well protected.”

No sales prior to TOP,  each and every unit needs a certification for Quality Mark.

The developer that carries no- sale licence are allowed only to take up construction but not to sell any single unit while the Temporary Occupation Permit is not yet on hand.

A “sale licence” can only be used by the developers to sell a unit the moment when  Building Plan Approval is awarded, stressed URA on their website.

The old Normanton Park was cleared for 1,863 apartment project development, eight commercial spaces, 19 landed strata houses around the site. Nevertheless, the COH implemented some regulations where Kingsford Huray has to follow per no-sale licence: strict observance with the property Housing Developers (Control & Licensing) Act side by side with Housing Developers Rule: no developer is allowed to sell unit or units in any property development without the written approval of the COH and Kingsford Huray needs to secure Quality Mark certification for each and every unit of the development around Normanton Park. The said certificates are prerequisites before sending any proposal with COH to sell any units.

Kingsford Huray has to put into writings informing the COH to any changes to the key position of the company or any change related to the development or the developer itself within 14 days. No -sale licence remains effective until such time that the developer is informed through writing the Controller stating that a licence under an Act is not valid anymore for any housing development or otherwise an early amendment of the Act,” per COH ‘s notice to Huray, January 15th of 2019.

COH’s needed requirements for developers to get Quality Mark Certification inorder that a project to be authorized is to ensure homebuyers that the project units are in progress and about to be finished in a just and reasonable quality standard”, told URA spokesperson. The no-sale licence of COH is set to the developer to comply with the needed requirement like the track record of with a  satisfactory rating over the project, URA added. ” The no-sale licence favours the developer to start the building the project development but needs first the approval of the COH to be able to sell the units off-plan.”

Track record

Past developments have been given consideration. Per URA’s explanation, The BCA or Building and Construction Authority have discovered that few of the buildings serve as barriers, windows and common shelter have broken some rules needed requirements per Building Control Act and Regulations specifically for Kingsford Waterbay housing project along Serangoon View. Another important thing which was given consideration was the feedback received from the buyers of the famous Kingsford Hillview Peak, the other project of the said developer.

Kingsford Huray Development Holding Company, known as privately owned Kingsford Development, endowed by  Chinese Cui Zhengfeng, the chair of the company. Cui was a civil servant prior to being a manufacturer and a developer. His real estate development business in Shenyang also called as “Kingsford Development, was run by his beautiful daughter. Cui lives in Singapore and in 2014, he became a citizen of it.

Kingsford Development initiated a stir after Cui’s hand in his highest top six bids in a residential housing development areas along Hillview Rise under Government Land Sale (GLS) way back 2012. Not a public knowledge that Kingsford Development spent paid $243.2 million or ($638 psf per plot ratio) over the land which has been converted into 512-unit Kingsford Hillview Peak. That becomes the benchmark of developer’s maiden developments in  Singapore, and  2016 was its total completion.

Kingsford Development of Cui added another by topping seven developers to sweep thew adjacent two 99-year leasehold housing sites around Upper Serangoon View, another 2013  GLS.

He paid as high as of $460.4 million ($522 psf ppr) for the two sites, which in turn was fused and converted into a productive Kingsford Waterbay. The said projects showcase 1,157 apartments, semi-detached two strata houses facing Sungei Serangoon which obtained TOP, Temporary Occupation Permit somewhere in November 2018.

Another eyebrow-raising transaction, Kingsford Huray surfaced as the buyer of the previous Normanton Park, carrying a huge bid that reaches to $830.1 million last 2017 of October. This marked the first-ever en bloc acquisition of Kingsford Huray and considered as one of the huge or biggest in Singapore up to the present.

 

What are the costs?

The 488-unit Normanton Park nestled right across Southern Ridges, Ayer Rajah Expressway and Science Park. On top with the huge $830.1 million amount price tag, an approximation of $231.1 million need to be offered or paid so the lease would be top-up to a fresher 99 years. Such differential premium, which is as high as  $283.4 million will be utilized in redeveloping the 660,999 sq ft land site matched with a 2.1 plot ratio which was payable, divulged by Knight Frank, Normanton’s Park marketing agent, during a press released for the announcement of en bloc acquisition somewhere 2017 of October.

Based on GFA of 1.39 million sq ft, area land rate in Normanton Park reach to $969 psf ppr, inclusions are the 10%  balcony bonus, 2.31 proposed plot ratio, the area price runs more or less $923 psf ppr, Knight Frank estimated.

Revenue Authority of Singapore (IRAS) on the ABSD amount, from the 15th day after the date of the en bloc sale and purchase agreement until the date of payment.

“This sounds rude, Lee acknowledges.”It’s absolutely challenging being a competitive developer now.”

Per policy of no-sale licence, real estate developer has more chances to be affected with  ABSD malus at 15% ( current rate), while developers have to create and sell their housing units within the five years to be able to comply along with their proposition for ABSD exemption, told Lee Liat Yeang, Dentons Rodyk Real Estate senior partner. With the clawback of ABSD,  it comes in also with 5% interest fee chargeable to Inland Revenue Authority of Singapore (IRAS) for ABSD amount, starting on 15^th day following the date of purchase payment and en bloc sale until the payment date.

If only en bloc acquisition been completed following the recent property cooling policy was implemented on  6^th of July, 2018, the ABSD must have been more savage at 25% plus 5% ABSD upfront, told Norman Ho, the deputy head of Rajah & Tann Singapore.

Both the no-sale licence and sale already existed way back 1985 of January, when Housing Developers (Control & Licensing) Act and Housing Developers’ Rules were introduced and implemented. “ Often, the no-sale licence is promulgated or issued during when the developer is a newbie, no portfolio or had broken the stipulated terms on its past sale licence, for example, selling units prior in obtaining the COH’s final approval,” Ho further shared.

Kingsford Huray is not the first to be reprimanded from the sale of housing units. Last December 2012, Hao Yuan, a Chinese developer of Yuan Investments was requested to stop the sale of executive condo units, specifically at Forestville’s 653- unit in Woodlands. This took place right after  1,201 buyers balloted for several units alone in the first day of marketing sales. Nevertheless, the developer has left with no choice but to close its showflat and not permitted for any option to buy the units.

The reason for this was because Hao Yuan continued to launch the housing project in spite of the changes to the development plans which was not approved yet by the COH. The developer was only given the chance to open again its showflat and start sales somewhere in June of 2013. This was right after the “satisfaction” of COH and this is where approval of the project development marketing plans was awarded and plans in the sales leaflets synchronize with the approved proposals.

In Normanton Park, an evaluation shows few among 13 blocks stayed standing as of April 12.  Some were demolished to give way for the project development.

Agents stuck in dark?

The property housing agencies were well informed that Normanton Park is still under COH approval. But if we’ll take a look at its online ads done by property advertisers, many still have no knowledge regarding no –sale licence, applications and its relevance.

“The URA already referred several cases synonymous to Normanton Park,” said the spokesman of Council for Estate Agencies(CEA), the real estate agency’s regulatory body. “Investigations are in progress and CEA will not think twice to implement any needed action against those agents or agencies who fails to comply.”

June 2013, the CEA released a circular act concerning ads on real estate industry where clearance for sale has not been awarded yet by the designated authorities yet. “ Property agents and agencies must not advertise housing developments that simply implies or mislead the buying public that such project has its approval for sale when the truth is, approval is pending yet,” told CEA. “Agents and agencies are don’t have the authority to use words like “new launch”, VVIP preview register, and those other words having synonymous meaning in the said ads because such words or wordings might mislead or misinform the buying public.

CEA stressed, property agents and buying public can visit URA’s website to evaluate if a certain residential development is under an approved for sale or not.

Meantime, Cui of Kingsford Huray is not available for any feedback, suggestion or reviews despite the many attempts. The verified address of Cui’s company is along Sentosa Cove, a mesmerizing waterfront residential right in Sentosa Island. This is such a beautiful bungalow that has a price of $33 million at 18,794 sq ft in late 2013. This is considered the biggest land plots around Sentosa Cove. The homes come in six bedrooms, huge pool, plus the adjacent view to the waterway. Starting from the roof terrace, it captures an 18,794 sq ft panoramic view of the Southern Islands and view of the sea. For Cui, his luxurious waterfront residence is a great place of any legal business.