Keppel Land announced that it has granted a six-month extension to an Indonesian investor who bought 51 units at The Suites @ Central in Devonshire Road on the condition that requires the buyer to pay S$0.5m per month during the extension period. The investor bought the 51 units in June 2007 at $1,806 psf for around S$127m under the deferred payment scheme. It is also working on collecting the payments for 5 units by May from two other Singaporean buyers who missed the payment deadline. Keppel Land has received payment for the other 101 apartments in the 157-unit project, which is a 60-40 joint venture between Keppel and Chip Eng Seng.
The recently transacted prices in the project have been around S$1500 psf which is at a 17% discount to the Indonesian buyers price of S$1806 psf or at a 38% discount from peak of S$2426 psf. We estimate Keppel Land's breakeven around S$1300 psf. If the 20% deposit is forfeited, the revised breakeven for those units would be around S$1040 psf which is still at a 30% discount to the current pricing levels. In the worst case of the buyer unable to make the payment, Keppel Land could repossess and resell the units at the current pricing levels or hold it for a longer term.
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