What a weekend!
Parc Botannia saw a total of 230 units sold on its first weekend launch. That works out to be around 92% of the 250 units released for Phase 1 launch and 31% of the total units in the project. The average price of the units sold was around S$1,270 psf. It was reported that the buyers were mostly locals and popular units included 1-bedroom, 2-bedroom and 4-bedroom units. According to the EdgeProp, over 500 cheques were received as expressions of interest prior to the launch weekend and units had to be sold by balloting due to overwhelming demand.
Construction costs fully funded. Financial risks of developers reduced significantly.
SPK estimates that the 230 units sold would translate to a total sales revenue of approximately S$225 mil. The progressive payment from buyers of these 230 units would probably be sufficient to cover the construction costs, marketing costs and professional fees of around S$200 mil to S$230 mil.
What would Sing Holdings do next?
With the construction costs and fees fully funded, Sing Holdings is now in a very comfortable position to hold on to the remaining inventories at Parc Botannia. There is little pressure for Sing Holdings to launch the remaining units in the near future. A typical strategy would be to hold back the inventories in view of rising prices going forward and launch the phase 2 at a later stage with higher prices. SPK would expect Sing Holdings to do so to maximize its profit from Parc Botannia and there might probably be more upside to SPK’s RNAV estimate of S$0.885 to $0.935 per share if Sing Holdings gets the timing right.
Congratulations to Sing Holdings and its shareholders!