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SDB’s One Draycott offers deferred payment schemes with extended completion, option exercise period

The 18-storey, 64-unit One Draycott obtained its Temporary Occupation Permit in April and its Certificate of Statutory Completion in July (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Property developers with completed projects are becoming more innovative with their deferred payment schemes (DPS). The latest to roll out a DPS is SDB Asia, the property development arm of Malaysia’s Selangor Dredging, for its project, One Draycott.

The 64-unit, freehold boutique condo at 1 Draycott Park obtained its temporary occupation permit in April and certificate of statutory completion (CSC) in July. It sits within one of Singapore’s most prestigious District 10 residential enclaves of Draycott, Claymore and Ardmore Park, just off Orchard Road.


“DPS can only kick in when a project has achieved the CSC,” says Eugene Lim, key executive officer at ERA Realty Network. “Such schemes offer buyers more flexible payment plans, which appeals to a larger pool of buyers.”

Search for the latest New Launches, to find out the transaction prices and available units

The typical payment scheme for a completed project is as follows: an option fee of 1% on the unit’s purchase price, followed by another 4% a fortnight later when the option is exercised. Any additional buyer’s stamp duty (ABSD) will also be paid when the option is exercised.

The following 30% down payment will be due eight to 12 weeks later. The down payment can be a mix of cash and Central Provident Fund Ordinary Account savings. If a loan has been taken, the balance of 65% will be paid through mortgage payments.

Show unit of a two-bedroom apartment at One Draycott (Photo: SDB Asia)

Two alternative schemes

Besides the typical payment scheme, SDB Asia offers home buyers two choices under its DPS: an extension on the sale completion period or a longer option exercise period.

For the DPS with an extended sale completion period, the buyer will pay a 1% option fee followed by another 9% down payment when the option is exercised two weeks later. Any ABSD due will also be paid then. However, the buyer will only need to pay the next 25% down payment six months (24 weeks) later instead of the usual eight to 12 weeks.

“This longer sale completion period is helpful for those who need more time to come up with their cash payment or to secure a loan,” says an SDB Asia spokesperson.

The second DPS offers the buyer an extension in the option exercise period and the ABSD payment. However, the upfront option fee is higher: 5% for those who want an eight-week extension on the option exercise period and 10% upfront for those who want a 16-week extension on the option exercise period. The following 20% down payment will be due eight to 12 weeks later.

Read also: One Draycott: Live in bespoke luxury in the prestigious Ardmore-Draycott enclave

Such DPS will be popular with buyers who need flexibility in payments, says Mark Yip, CEO of Huttons Asia. “Buyers will appreciate the longer sale completion period and extension on the option exercise period when they are waiting for their funds from other investments which they have exited,” he observes.

Outdoor dining and entertainment area at One Draycott (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Catering to those in ABSD, citizenship limbo

“An extension in the option exercise period is also ideal for home buyers who need more time to sell their existing home,” says the SDB Asia spokesperson. “The buyer could also avoid paying the higher ABSD for the second or third property.”

Since the April 27 property cooling measures, ABSD for Singaporeans buying their second residential property has been raised to 20% and 30% for their third and subsequent property.

Permanent residents (PRs) must stump up 30% ABSD on their second residential property in Singapore and 35% on their third. Meanwhile, foreigners must pay 60% ABSD on any residential property purchase.

“Some buyers might be waiting for Singapore PR or citizenship application to be approved or are selling their current property or other investments,” notes Huttons’ Yip. “These buyers may opt for a longer option exercise period.”

The SDB spokesperson says it is also helpful for parents who want to buy a unit at One Draycott for their children turning 21 in a few months.

Read also: Jui Residences: A heritage icon along Kallang River

Lap pool at One Draycott (Photo: Samuel Isaac Chua/EdgeProp Singapore)

‘No price variance’

On top of higher ABSD, home buyers face higher interest rates when taking a mortgage. Borrowing limits have also been tightened in the September 2022 property cooling measures, with the loan-to-value ratio reduced to 75% for first-time home buyers, 45% for second-time home buyers, and 35% for those buying their third residential property.

The DPS offered by SDB was launched on Aug 1. So far, one Singaporean buyer has taken up the scheme. He opted for an extended option exercise period when purchasing a 797 sq ft two-bedder on the 16th floor for $2.86 million ($2,591 psf), according to a caveat lodged on Aug 4.

Generally, developers will charge a premium for those who opt for the DPS compared to those who purchase under the typical payment scheme. However, in the case of One Draycott, “there is no price variance”, according to the SDB spokesperson.

Drop off area at One Draycott (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Price cuts of up to $150,000

To date, 30 units at One Draycott are still available for sale. They are a mix of two-bedroom units with sizes of 732 and 797 sq ft, as well as a two-bedroom penthouse of 1,346 sq ft with a double-volume ceiling.

SDB is also offering a $150,000 discount for the 732 sq ft two-bedders, priced from $2.48 million ($3,388 psf) before the discount. The 797 sq ft two-bedders are priced from $2.62 million ($3,287 psf) before a $25,000 discount.

Buyers who opt for the DPS are also eligible for the price discount, says an SDB spokesperson.

“The DPS, therefore, gives buyers the flexibility and incentive to grab this opportunity to own an asset at the prestigious One Draycott, take advantage of the $150,000 discount, which is hard to come by in such a prime area, and at the same time have ample time to sell their current property,” says Ken Low, managing partner of SRI.

The 64-unit One Draycott is located in the prime Ardmore Park, Claymore and Draycott neighbourhood off Orchard Road (Source: EdgeProp Landlens)

Low has also seen an increase in viewings and enquiries at One Draycott since the schemes were launched in August.

One Draycott has 60 two-bedroom units of 732 and 797 sq ft and four penthouses on the topmost floor of the 18-storey tower. These penthouses are also two-bedroom units with a similar layout as the other two-bedroom units. The difference is that they enjoy a double-volume ceiling, which brings their sizes to 1,238 and 1,346 sq ft.

Since the project was launched in June 2018, 34 units have been sold, including three penthouses. The buyers are predominantly Singaporeans and PRs, according to SDB. The highest psf price achieved at One Draycott to date is $3,689 psf for a 732 sq ft, two-bedroom unit on the ninth floor that fetched $2.7 million in July 2018.

View towards Stevens Road and Balmoral Road area from One Draycott (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Investors, rental rates

“DPS buyers can also choose to move in or rent out the unit and start collecting rental as passive income after exercising the option,” adds SRI’s Low. “This provides huge flexibility and upside for buyers in One Draycott.”

The extended completion or option exercise period at One Draycott will appeal to investors looking to capitalise on the strong rental market, says ERA’s Lim. “The DPS will not affect their cash flow in the initial period.”

In terms of rental rates, two comparable projects are 8 Hullet, a 44-unit, freehold boutique condo with one- and two-bedroom units of 538 to 797 sq ft; and 3 Cuscaden, a 96-unit, freehold condo on Cuscaden Walk, just off Orchard Boulevard. Both projects were completed in 2022.

Another show unit of a two-bedder at One Draycott where owners can move in or rent it out immediately (Photo: SDB Asia)

The latest rental transaction of a two-bedder of 700 to 800 sq ft at 8 Hullet was for a unit leased for $6,750 or $9 psf per month in May 2023. Meanwhile, in July, another two-bedder of 700 to 800 sq ft at 3 Cuscaden was leased at a monthly rental rate of $7,300 or $9.73 psf. Both are based on URA rental data as at the end of August.

Will more developers of completed high-end condos with unsold inventory offer DPS to home buyers? “Such schemes can be viewed as indirect financing for buyers and are costly to developers,” says Huttons’ Yip. “Not many developers will offer them.”

Some developers are offering such schemes selectively, notes SRI’s Low. Examples include Lumos at Leonie Hill, The Oliv@Balmoral, and Seascape and Cape Royale “on a case by case basis”, he adds.

Check out the latest listings for One Draycott properties

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