The Candy Brothers

Ultra-luxury real estate developers, Candy & Candy were sucked into what could have been a disastrous situation recently when one of their partners in two large scale projects, Icelandic bank Kaupthing, was nationalized by the Icelandic government this month. Candy & Candy have apparently come to a deal whereby they have relinquished interest in NoHo Square, a 12-acre project on the old Middlesex hospital site in London, in exchange for a majority stake in 9900 Wilshire, a luxury condominium development in Beverly Hills, Los Angeles.

Perhaps not the ideal timing, but I understand CPC Group, who represent Candy & Candy were in a position to take majority stakes in both shemes. This could have resulted in a lengthy legal battle with Kaupthing, so a quick decision was reached. NoHo square has already been put up for sale, although there are some suggestions that it has now lost as much as £160 million in value, due to falling property values in London.

Candy & Candy must still re-negotiate the loan  on 9900 Wilshire - which is now in default, and face the issue of selling luxury condominiums into an already over supplied market. Los Angeles is one of the hardest-hit US markets currently, with the S&P Case shiller index showing a fall of 26.7% in home values in LA over the last year.

Fortunately, Candy & Candy are well placed to weather the current financial storm, and their Chelsea Barracks project appears to have solid backing. Considerable opposition was voiced when the project was first announced, with the Duke of Westminster voicing the opinion that the development, which is being financed by the Qatari royal family after buying the site from the Ministry of Defence, is “more akin to office complexes,” than homes.

Many of C&C’s developments are at the very top end of the luxury real estate market, such as One Hyde Park in London, so assuming the Russian government continues to pump money into their ailing financial markets at the rate they are doing, there should be enough Russian billionaires left to keep them out of trouble.

NoHo square
9900 Wilshire
Candy & Candy

Turnberry Towers in Houston

Turnberry Tower, a 34 storey luxury condominium development in Houston has been canceled.

Turnberry’s $3 million sales office was closed on Monday. The Tower had originally been planned to offer limousine services, maid suites and two, 15,000 sqft homes. Relatively speaking, one would have expected an oil-based economy such as Houston’s to be withstanding the current financial storm a little better than much of the rest of the US, but even here the credit crunch is taking it’s toll. Turnberry is a well established developer with substantial successes and completed high-end condominium projects all over the US, and has pledged to return all deposits already taken with appropriate interest accrued.

Turnberry Associates said the 184-unit development planned near the Williams Tower has been “discontinued” as turmoil in the financial markets has caused traditional construction lending sources to dry up. The Houston Chronicle

Investment banks asked to justify bonuses

It would appear I am not the only one to be wondering if the bonuses planned by many Wall street investment banks this year is an appropriate use of the recent government capital injections - or if it is enough to kick-start the sluggish NYC luxury property market. Representative Henry Waxman, chairman of the House Committee in Oversight and Government Reform wrote letters yesterday to nine firms after announcements that there is an intention to pay out $108 billion in employee compensation, much of it in the form of bonuses - almost the same amount as paid out in 2008.

I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry’s worst years on record. Henry Waxman The Boston Globe

I for one will be interested as to whether Mr. Waxman’s bite is as strong as his bark.

Luxury Property prices in London down 12%

Docklands Penthouse London

According to Liam Bailey, head of residential research for Knight Frank, luxury property prices in London are down 12% from last year’s levels, and The New York Times is selling a nice 2 bedroom condo in London’s docklands for $1.4 million.

This two-bedroom two-and-a-half-bath penthouse apartment overlooks the River Thames on the Isle of Dogs, part of London’s Docklands area. The living area has a double-height ceiling and oversized windows with views of the river. Above the living room, on the mezzanine level, is a cinema room. A private roof terrace has a container garden and a gazebo; it also looks out over the river. Both bedrooms have en suite bathrooms, and there is a half bath off the foyer. The apartment runs the entire length of the sixth floor. New York Times

Luxury Real Estate Auction in Colorado

We recently reported on an up-coming sealed bid auction of a number of luxury properties in Colorado. I spoke with Scott Franklund, the organizer of the auction yesterday, who reported that the auction had been “successful,” whilst being rather cagey about actual prices. This was the company’s first sealed bid auction and Mr. Franklund confirmed that they will certainly be running more in the future. We both agreed that realistic pricing will lead to succesfull sales of luxury property, almost regardless of the current market conditions. Not all properties up for the auction sold, although there was an approximately 50% close rate. Somerset Manor, reduced in price from $7.3 million to $ 5.3 million, was one of those that failed to sell.

Luxury Real Estate Auction in Colorado

Problems in the US real estate market are causing projects as far abroad as India to be halted

One Las Vegas

BSR Engineering and Development Ltd, a major player in the world-wide luxury development market, is suspending all real estate activity in India until further notice. The company notified the TASE (Tel Aviv Stock exchange where they are listed) that it had canceled its participation in a $20 million luxury residential project in Bangalore, which was slated as a residence for foreign workers in Bangalore’s IT sector.

BSR cited the situation of the global real estate market in general and in India and the United States in particular as its reasons for suspending activity in India. BSR Engineering is facing problems with several of its developments. At a bondholders’ meeting of subsidiary BSR Projects Ltd, the company said that projects in the US were in a very difficult situation, a mezzanine loan was in big trouble, and a major project was heading for receivership.  What I hear is that BSR is desperately looking for more financing for their project in Las Vegas - “One Las Vegas,” a 19.5 acre master-planned residential “lifestyle,” condominium development, and is likely to be issuing a going concern warning soon.

I came across an interesting luxury real estate marketing technique recently.

Live, webcam walkthroughs.

Max Ribitzky of HQ Marketing Partners, a luxury real estate brokerage in Manhattan has taken the walkthrough digital. Faced with a buyer in London and an apartment for sale in Manhattan, Mr Ribitzky, armed with a laptop and a High-definition video camera hooked up to a video conferencing service, spent three days walking through the apartment, allowing the client to direct his actions and following along on her own laptop in London.

The result – a 1.9 million dollar sale of a 44th floor apartment in the Highpoint condominium development on East 40th street. With the buyer never stepping foot on the premises.

HQ Properties is a cutting-edge real-estate development, marketing and brokerage group located in the heart of Chelsea, New York.

Tough times call for tough marketing and with the dollar at an all-time low, foreign buyers are to be attracted at all costs. Including walking around with a video camera. Well worth the effort apparently.

Michell Asayag, President of HQ says:

In the past few months we have been working with a growing number of investors from three countries in particular: Germany, Great Britain and France. Thanks to strong currencies, as well as realistic price points for quality development - especially in the outer boroughs - we have seen interest in luxury condos soar since the beginning of 2008. I personally find that Manhattan condos - both downtown and uptown – are still the main draw, with Brooklyn and Long-Island City a close second and third.

HQ Properties

SC Global Developments is a luxury real estate developer based in Singapore that deals almost exclusively in high –end residential properties. Perhaps their most well-known development is The Marq, a luxury condominium development on Paterson Hill. The Marq was marqueted (sic) in an unusual, “invitation only,” preview and set a new record for luxury condominiums in Singapore – a single unit selling for $31 million which pushed the price over $5,000 psf for the first time.

SC Global managed this feat by including some unusual features – each unit in the Marq includes, amongst other things, a 15 meter cantilevered lap pool and takes up an entire floor of the building. The first release sold out within 7 days.

SC Developments is listed on the main board of the Singapore Stock Exchange and quotes them selves as having a market capitalization of approximately $700 million US. They also own a 42% stake in AV Jennings Ltd, one of Australia’s leading housing developers.

Company details:

SC Global Developments Ltd (formerly: ANA Hotels Singapore Ltd)
    
Incorporated in :    SINGAPORE
    
Incorporated on :    15 Nov 1977
    
ISIN Code :         SG1W16938290
    
Registered Office :    47 Scotts Road #18-01
                                     Goldbell Tower
                                      Singapore 228233
    
    
Telephone:    65 67349119
Fax:                 65 62355115
    
Secretary:    Fong Keng Chee
                       Lee Wan Ling

SC Global Developments was originally incorporated in Singapore on 15 November 1977 under the name of ANA Hotels Singapore Pte Ltd, as a subsidiary of ANA Enterprises Ltd. It acquired a hotel from People’s Realty Co Ltd and commenced business as Century Park Sheraton in 1978. It was converted into a public company on 28 October 1982 and took on the name ANA Hotels Singapore Ltd. In February 2000, the company’s principal activity was changed from hotel proprietor to property developer and the name was changed to SC Global Developments at an Extraordinary General Meeting of shareholders.

They have gone from strength to strength and are now considered to be one of Singapore’s premiere luxury residential real estate developers.

SC Global Developments
 

Mitsui Fudosan is a well-established Luxury real estate developer based in Tokyo, Japan, originally established in 1673 with the opening of the Echigo-ya clothing store in Nihonbashi by Takatoshi Mitsui, founder of the House of Mitsui.

The Mitsui Company real estate section was founded in 1914 and became a separate entity in 1941 as the Mitsui Fudosan Co Ltd with 3 million Yen and wholly owned by the Mitsui family. 1961 saw the beginning of their foray into residential and vacation property and subsequently they building of Japan’s first skyscraper, the Kasumigaseki Building.

Japan’s First Skyscraper

The company has been at the forefront of luxury property development in Japan, building both residential and commercial properties. Notable properties include, but are not limited to:

• LaLaport Funabashi, Japan’s first large-scale regional shopping center, now called LaLaport Tokyo-Bay in 1981.
• Tokyo Disneyland by Oriental Land Co., Ltd., a joint-venture company set up in partnership between Mitsui Fudosan and Keisei Electric Railway Co., Ltd in 1983.
• Tsurumi Hanaport Blossom, the first factory outlet mall in Japan (Osaka) in 1995
• Nihonbashi 1-Chome Building (Coredo Nihonbashi) (Tokyo) in 2004.
• Mitsui Garden Hotel Ginza (Tokyo) in 2005.

Mitsui continues to grow, expanding into overseas ventures. Two upcoming projects are the St Regis Hotel & Residences in Singapore (planned completion 2008) and The Oceanfront@Sentosa Cove, a luxury condominium development East of Sentosa Island in Singapore.

The Oceanfront comprises five towers, 12 to 15 storeys high, each with a special curtain wall feature, exemplified by curve lines and planes that create a dynamic yet contemporary space. All 264 exquisitely designed apartments, ranging from spacious two-, three-, four-bedroom units to penthouses (Villas, Sky Suites and Sky Villas) feature full-height glass panels in the living and dining rooms to best take advantage of the magnificent waterfront views. All apartments will have a private lift lobby and most will include balconies. The early bird average price was set at $1,300 per square foot and sold 85% in the first four days of being offered. Prices for individual condominiums ranged from $1.5 million to more than $8 million. Completion of this project is expected 2009.

Mitsui Fudosan