The New Paper last Friday ran a rather interesting article on how a developer revamps units at a condominium for better earnings.
The offer price to buy the development en bloc was below expectations. So the developer, Melodies Limited, which owns Cassia View, decided to refurbish the place and then resell each unit individually.
The units, which had been rented out, are all owned by the developer.
The company is now expecting to get $15 million more from the sale of the units. And with 80% of the units sold so far, the developer looks to be on target.
It started when the 20-storey, 72-unit freehold project on Guillemard Road was put on the market last year.
At that time, it attracted a $70 million bid, or about $780psf of strata area. But Melodies felt that the offer price was too low. So they decided to spruce up the apartments and sell them individually.
The $3 million renovation bill it chalked up included refitting kitchens with new tiles, cabinets and appliances. Bathroom fixtures from high-end brands were installed, doors were changed and bedroom parquet floors were polished. External walls also received a new coat of paint. The renovations started in May.
Post-makeover, the average price is about $980psf. The bulk, or 67 of the 72-units, is three-bedroom units with area of between 1,100 and 1,200sqft. The two-bedroom apartment has an average floor area of 900sqft, while a penthouse averages about 2,300sqft.
To date, buyers have taken up more than 57 units in the single tower located next to Kong Hwa school.
Overall, the units are expected to fetch $85 million – or $15 million more than if it were sold at last year’s rejected offer price for the development en bloc. Demolishing and rebuilding the property would have resulted in a $30 million price tag.
Buyers, too, end up paying less for a refurbished apartment. A three-bedroom unit is priced between $1 million and $1.3 million. A similar unit can cost up to $1.6 million if it was built from scratch in that area.
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