Sim Lian cuts back on $880K HDB pricing

Sim Lian Group Ltd wishes to announce the confirmed price range for Centrale 8 at Tampines:
It is regrettable that during the application period, the media and members of the public did not take note of our repeated public emphasis that the price range which we had announced was only an indicative price range, and would not be the final sale prices for the respective types of flat units.
In view of the interests in Centrale 8 at Tampines, we are pleased to announce the confirmed price range for this DBSS project as follows:
3 Room: $389,000 to $445,000
4 Room: $511,000 to $592,000
5 Room: $685,000 to $778,000

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After getting whacked in the online space and in the print media for their S$880K HDB pricing, Sim Lian is sounding pissed off.  The S$880K indeed has been over-dramatised in the print media.

Still, did the negative publicity force Sim Lian to 'cut' its pricing. And is 685-778K for a 5-roomer sounding reasonable? or affordable? I'd rather get a condo for that price.

Sim Lian very pissed off with the media for the coverage on the DBSS saga for the past  few weeks. Now things just got worse! BT had a pg 1 story on the fantastic profit that Sim Lian was making..... Turned out the newspaper got it wrong!


The Board of Directors of Sim Lian Group Limited (the “Company”) refers to the Business Times article entitled “Profit margins for DBSS developers ‘look high’” published on 30 June 2011 and wishes to clarify that the land price of $82,222,000 and the maximum GFA of 721,188 square feet for our project Centrale 8 are incorrect and therefore the profit and gross profit margin are correspondingly incorrect.
The land price for Centrale 8 is $178,128,000 as stated in our announcement no. 112 of 3 August 2010 and the maximum permissible Gross Floor Area is 682,384.9 square feet as
stated in our announcement no. 164 of 6 August 2010.

Khaw Boon Wan says:

Startling But False

I was startled when I read the front page article in the Business Times “Profit margins for DBSS developers ‘look high’ ” (Jun 30). It alleged that the DBSS developer’s profit margin for Centrale 8 was 76%, even after it had reduced its highest selling price by over $100,000.

I thought it could not be right and had it checked. Sure enough, the article was fraught with serious errors.

For example, it quoted a land price of $82,222,000 and a maximum GFA of 721,188 square feet for the project. Both figures were wrong. The correct figures were respectively $178,128,000 and 682,385 square feet. This was a huge difference of almost $100 million. The errors led to a gross over-estimation by BT of the developer’s profit and gross profit margin.

Based on these figures alone, the profit margin would have been 26%, not 76%.

But even the reduced figure was wrong, as the article had excluded key cost items such as financing, marketing and administrative costs. These are significant costs and when included, would have further lowered the profit margin for all the DBSS projects listed in the article.

I have been in MND for 5 weeks, and not sleeping well. I am working my guts out to try to calm the market, for the good of all Singaporeans.

But I can’t do it alone. I need all to help.

HDB architects are working round the clock to ramp up BTO supply. Contractors are building up capacity to deliver the flats on time. HDB is setting BTO prices carefully to help guide the market.

I hope our media can do their part too. There is some panic buying out there, by people worried that prices will continue to rise. Sensationalised articles will merely feed the frenzy.

If only BT had verified the facts, the misleading article could have been avoided. Please help to circulate this blog to your friends.

OMG, Sim Lian suffering from the negative publicity.

According to MediaCorp, only 35% of the DBSS flats in Tampines have been sold.

SINGAPORE: It was a slow start to the first weekend of the walk-in-and-buy phase of the most expensive Design, Build and Sell Scheme (DBSS) flats to hit the market.

When MediaCorp visited the showroom of Centrale 8 on Saturday at 6pm, around 20 families were viewing the project. A board which listed the availability of the 708 units in the project, said around 35 per cent of the flats have been sold since the project was opened for sale.

Potential buyers that MediaCorp spoke to said they were at the showroom to see if prices have fallen further and were cautious about selecting a flat because of the high prices.

40-year-old Zack Henry said: "It (Centrale is near the MRT and Tampines Mall but the flats are expensive. I might as well go for an Executive Condominium (EC)."

Another potential buyer, who only wanted to be known as Mr Wong, said: "The price is high but it is not a private property. It is a Housing Development Board (HDB) project with HDB restrictions and there are no other amenities."

"We like the project because of the location. But if the price remains high, we'll just stay out."

Centrale 8, developed by the Sim Lian Group, made the news last month with a record asking price of S$880,000 for a DBSS flat, triggering an outcry that the price was nearly that of executive condominiums.

Property analysts said they are surprised at the low take-up rate and said the negative publicity about the high prices of the project may have affected buyers' sentiments.

SLP International's head of research, Mr Nicholas Mak, said: "They have to find out why sales is slow and address the problem…if sales slow down, it's difficult to regenerate interest in the project."

He added: "Usually during the first weekend when sales is opened to public, there is an overwhelming response in the showroom."

Mr Mak said when faced with slow sales, developers could reduce prices and increase the value of the flats by providing finishes, like marble instead of tiles.

Dennis Wee Group director Chris Koh said: "The government announcements to review the DBSS and EC schemes, and Sim Lian's high prices could cause some to take a step back - and wait and see."

He noted that if Sim Lian decreased its flat prices now, he will be "concerned for those who have already bought."

"And it affects the creditability of the company. So it's not about cutting prices. It is about winning back the confidence of buyers. We may have to wait a while to better gauge the response."