AT A time when many developers are relying on growing foreign demand to boost their home sales, Indonesia's Lippo Group is instead targeting local buyers for its residential projects here.
Despite pricing its Newton One development at a slight premium over similar offerings by its rivals, the property group has been pleasantly surprised to find that two-thirds of buyers are Singaporeans.
This seems to go against the accepted wisdom that pricier homes cater more to foreigners than locals.
Of three recently-launched condominiums in the Newton area, Lippo's Newton One - its first residential development in Singapore - has the highest price per sq ft (psf).
Apartments in the 91-unit project went for an average of $1,250 psf, or about $1.5 million for a 1,200 sq ft apartment.
This compares to average prices of about $1,220 psf for City Developments' nearby Residences @ Evelyn and less than $1,000 psf for Park Infinia by Keppel Land at Wee Nam Road.
Lippo has unloaded almost all the units in its freehold condominium since sales started in June, with just two units left as of last Friday, the group said.
'The first few days after we launched Newton One, all our eight five-bedroom units were snapped up, and mostly by locals,' Lippo deputy chairman Stephen Riady told The Straits Times.
'To be frank, I am also a bit surprised,' he said in an interview.
'But from this experience I learnt that if you price between $1,200 psf and $1,500 psf or even up to $1,600 psf with the right location and good design, you can target not only foreigners but also some wealthier locals.'
Consequently, the developer is now aiming to get more Singapore home buyers even for some of its upmarket projects, as a customer base that is mostly local tends to be less volatile, said Mr Riady.
'When the market is very, very good, you can sell 90 per cent of your project to foreigners, but when the market is weak, foreigners may not want to come in,' he explained.
'So you want to have balance. You don't just want foreign buyers, you also want local demand, which is more stable.
'We like targeting this range, about $1,300 psf to $1,600 psf, where we can cater to both foreigners and Singaporeans.' In line with this strategy, Lippo will launch its next development - a 270-unit freehold condominium on the Kim Seng Road site that it bought from OCBC Bank in April - at average prices of between $1,500 psf and $1,600 psf.
The project, to be launched next February or March, will have about 90 units each of two- and three-bedroom apartments at 1,300 sq ft and 1,900 sq ft respectively. There will also be 60 four-bedroom units of 2,000 sq ft and 30 five-bedroom, 2,500 sq ft units, Lippo said.
Lippo also has a block of 100 units in CapitaLand's RiverGate condominium that it bought last year. It plans to start selling the units either by the end of the year or early next year at average prices of between $1,600 psf and $1,650 psf, for a healthy profit.
Also in the pipeline is Lippo's joint 99-year leasehold project with CapitaLand in Alexandra Road that will be launched by year-end.
MR STEPHEN RIADY (above).
Targeting a more stable base
LIPPO is now aiming to get more Singapore home buyers even for some of its upmarket projects, as a customer base that is mostly local tends to be less volatile, says Mr Riady.
'When the market is very, very good, you can sell 90 per cent of your project to foreigners, but when the market is weak, foreigners may not want to come in,' he explains.
'So you want to have balance. You don't just want foreign buyers, you also want local demand, which is more stable.'
