Sing Holdings

[luckystar]

Like most other developers, Sing Holdings has transferred the unsold Robin Residence units to another company.

http://infopub.sgx.com/FileOpen/Announce...eID=442985

Based on the announcement, Sing Holding sold the remain 29 units at a lost of around 40 millions? This is based on the following statement.

"assuming that the SHR Disposal was effected on 1 January 2016, the Group’s earnings per share would have decreased from 6.55 cents to about 5.59 cents; "

Why is Sing Holdings rash to sell the reminding 29 units below cost? Is it because of QC? If IIRC, the QC will only due at end Dec 2017 since the project end Dec 2015? Even if it is because QC, the penalty should be lower than 40 mil as they had already sold 105 units or 78% of the total units.

I believe this is a genuine deal. Buyers and sellers may have been negotiating for a long time, haggling on price, and decided to close the deal before the 11 March deadline, as the 12% ACDS apply to the seller of the property holding entity (PHE). We have to give them the benefit of the doubt as it is quite impossible to find a buyer within 12 hours of announcement. But if they found a buyer within 12 hours, kudos to them too.

The loss of $3.85 million is negligible, compared to the 12% ACDS on the PHE NTA, which is definitely more than $3.85 million. 

Also, I believe QC charges apply retrospectively to ALL the units in the development, not just the unsold units. 

So you do the sums, I think this disposal is very timely and I view it positively.

[ngcheeki]

I just read the news release again by the government. The new property tax stamp duty ACD only applies FROM 11 March 2017 onwards.

However, Sing Holdings disposal was done on 10 March 2017. So technically, it beat the effective date.

in short, sing holdings found a buyer within 12 hours of the announcement.  

Based on the news, it seems like the buyer is more eager to close the deal than Sing Holdings.

"We will see fewer deals involving share sales of property-holding companies. The ACD will push up transaction cost of such deals and will weigh on the buyer's return on investment," noted International Property Advisor key executive officer Ku Swee Yong."

http://www.straitstimes.com/business/pro...from-today

[bargainhunter]

Like most other developers, Sing Holdings has transferred the unsold Robin Residence units to another company.

http://infopub.sgx.com/FileOpen/Announce...eID=442985

Based on the announcement, Sing Holding sold the remain 29 units at a lost of around 40 millions? This is based on the following statement.

"assuming that the SHR Disposal was effected on 1 January 2016, the Group’s earnings per share would have decreased from 6.55 cents to about 5.59 cents; "

Why is Sing Holdings rash to sell the reminding 29 units below cost? Is it because of QC? If IIRC, the QC will only due at end Dec 2017 since the project end Dec 2015? Even if it is because QC, the penalty should be lower than 40 mil as they had already sold 105 units or 78% of the total units.

I believe this is a genuine deal. Buyers and sellers may have been negotiating for a long time, haggling on price, and decided to close the deal before the 11 March deadline, as the 12% ACDS apply to the seller of the property holding entity (PHE). We have to give them the benefit of the doubt as it is quite impossible to find a buyer within 12 hours of announcement. But if they found a buyer within 12 hours, kudos to them too.

The loss of $3.85 million is negligible, compared to the 12% ACDS on the PHE NTA, which is definitely more than $3.85 million. 

Also, I believe QC charges apply retrospectively to ALL the units in the development, not just the unsold units. 

So you do the sums, I think this disposal is very timely and I view it positively.

if my interpretation in the earlier post is correct, they will only incur $485k loss this year for this transaction.

[luckystar]

I just read again the new tax rules, apparently both the buyers and sellers of the PHE have to pay ACD, excerpt below:

To better align the rates, the Government will impose the ACD on buyers and sellers who are significant owners. For buyers, on top of the 0.2 per cent share duty tax, they must pay ACD comprising 1 to 3 per cent on the value of underlying residential properties and a flat 15 per cent on the value of those assets.

Sellers, who are significant owners, disposing of their equity stake within three years of acquisition will have to pay a flat 12 per cent levy. The ACD does not affect ordinary share transactions in listed companies by retail investors.

[luckystar]

MND really good at squeezing property developers and buyers. Hats off to Lawrence Wong.

[ngcheeki]

Like most other developers, Sing Holdings has transferred the unsold Robin Residence units to another company.

http://infopub.sgx.com/FileOpen/Announce...eID=442985

Based on the announcement, Sing Holding sold the remain 29 units at a lost of around 40 millions? This is based on the following statement.

"assuming that the SHR Disposal was effected on 1 January 2016, the Group’s earnings per share would have decreased from 6.55 cents to about 5.59 cents; "

Why is Sing Holdings rash to sell the reminding 29 units below cost? Is it because of QC? If IIRC, the QC will only due at end Dec 2017 since the project end Dec 2015? Even if it is because QC, the penalty should be lower than 40 mil as they had already sold 105 units or 78% of the total units.

I believe this is a genuine deal. Buyers and sellers may have been negotiating for a long time, haggling on price, and decided to close the deal before the 11 March deadline, as the 12% ACDS apply to the seller of the property holding entity (PHE). We have to give them the benefit of the doubt as it is quite impossible to find a buyer within 12 hours of announcement. But if they found a buyer within 12 hours, kudos to them too.

The loss of $3.85 million is negligible, compared to the 12% ACDS on the PHE NTA, which is definitely more than $3.85 million. 

Also, I believe QC charges apply retrospectively to ALL the units in the development, not just the unsold units. 

So you do the sums, I think this disposal is very timely and I view it positively.

Based on the following information, QC extension charges is for unsold units only. 

"If the above conditions are not fulfilled (eg: the developer needs more time to sell his units), he will have to incur an extension charge that is pro-rated based on the number of unsold units.
Developers are able to have this time period extended to a maximum of 3 years. However, do note that the following fees are levied for extensions:

• First year of extension – 8% of land purchase price
  
  
• Second year of extension – 16% of land purchase price
  
  
• Third year & further extensions – 24% of land purchase price"
   

https://www.newcondolaunchonline.com/wha...-and-absd/

By the way, iSing Holding Robin Residence is also subjected to ABSD since the land was acquired at End Dec 2011. Based on the reply from the AGM by CEO, the ABSD due date was Dec 2016 and the amount Sing Holdings has to pay is S$6m unless the company was able to ask for an extension to end of March which I am not sure if it is possible.
The following is the 

"From late 2011, property developers have to develop all residential site that they buy and then ensure that the units are 100% sold within 5 years. Failing that, developers have to pay ABSD of 10% on the purchase price of the site. For sites bought from 12 Jan 2013, they will have to incur higher ABSD of 15%."

[bargainhunter]

On the contrary, I believe the CEO said they are not liable for ABSD for Robin Reisdences: Their original plot was bought before the ABSD for developers announcement and the 2nd plot was bought just after the announcement:

https://www.iras.gov.sg/irashome/Other-T...ase-Basis/

"Amalgamation of Land for Development by Property Developers
A developer may buy a second or more plots of land (referred as “second transaction”) to amalgamate with the first purchase of land for development (“referred as “first transaction”). Such second or more plots of land usually form part of a single development project.

In the case where the first transaction qualifies for ABSD remission, the developer may submit a request for remission on subsequent purchases of land plots and based on the additional land under the second transaction being amalgamated and developed as part of the development on the land in the first transaction. Each request for remission will be considered on its own merits. If the remission is approved, the qualifying developer would have to ensure that the whole development meets the remission conditions from the date of the first transaction.

In the case where the first transaction is not subject to ABSD, remission on the second transaction may also be considered on a case-by-case basis depending on the merits of each case, such as if the acquisition of the subsequent plot is contingent upon planning approval or if the plot acquired is incapable of independent development."

[luckystar]

It is complicated to do property development in Singapore. No wonder so many of them are venturing overseas.

Furthermore, the laws can be changed at the flip of a switch, like tabling in parliament and having the bill passed on the same day.

So not only business risk, developers have to face MND risk. Too challenging.

[bargainhunter]

Sing Holdings started the year with 34 units of Robin Residences to sell.

They sold 2 units with caveats lodged for $3.48m and $1.94m.

They sold an additional 3 units: #02-07 prob around $3.48m, #01-15 the showroom which they were asking for > $3m and #05-15 around $2.7m with caveats yet to be lodged.

Collectively, these 5 units alone will lead to a further increase of $0.036 in cash which is about 10% of the current share price. The profits from these 5 units will also ironically more than offset the $485k loss of the remaining 29 units which have just been block sold for $0.1813 in cash.

[bargainhunter]

It is complicated to do property development in Singapore. No wonder so many of them are venturing overseas.

Furthermore, the laws can be changed at the flip of a switch, like tabling in parliament and having the bill passed on the same day.

So not only business risk, developers have to face MND risk. Too challenging.

Somehow Sing Holdings has been unlucky:

while discussing purchase of 2nd plot of robin, kenna ABSD for developers announcement.
while discussing bulk sale of remaining units of robin, kenna this ACD announcement.

but somehow they also manage to get away with it.