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Singapores biggest loss-making apartment sale cushioned by currency fluctuations

#360fit: the St. Regis offers the perfect place to kick back and relax

Japanese billionaire Katsumi Tada suffered the biggest apartment sale loss of $15.8 million in Singapore when he sold a St Regis penthouse purchased for $28 million in May 2007 for just $12.2 million last month.

Even market watchers noted that the psf price was a bargain for a high-end home in the area. In fact, the unit previously owned by Tada was picked up for just $2,028 psf compared to the usual price range of $2,500 to $3,000 psf for luxury apartments nearby.

But the shortfall was actually smaller at $12.9 million if one takes into account the fluctuating exchange rate of the Singapore dollar versus the Japanese yen, said experts.

Based on Bloomberg data, one Singapore dollar was equivalent to 78 yen in 2007 when Tada bought the penthouse. As such, he acquired the property for $28 million or 2.184 billion yen back then.

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However, when the apartment was purchased by Yun Nam Hair Care owner Andy Chua, one Singapore dollar was equivalent to 87 yen. This means the unit changed hands for 1.061 billion yen and Tada only lost 1.123 billion yen or $12.9 million.

The weakening of the yen against the SGD could have cushioned Tadas financial losses, explained Saktiandi Supaat, Maybank Singapores head of foreign exchange research.

He shared that it is logical to invest in property markets where the currencys value is expected to appreciate relative to an investors home country.

Samuel Eyo, managing director of Singapore Christies Homes, said such investments are common among high-net worth individuals here.

Don't mistake that they're losing so much. There's a difference between the HDB owners with limited cash and very wealthy investors who have plans for everything they want to do, he added.

Image: Artist's impression of St Regis Residences.

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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