Complete Property Market Updates of Singapore

July 2, 2008

Cost of SICC’s fancy new clubhouse balloons

Filed under: General,Regulators — Propertymarketupdates @ 4:21 am

Construction crunch bites hard; project may cost 50% more than estimated

SOARING construction costs have prompted the Singapore Island Country Club (SICC) to drastically revise its budget upwards for the building of a new, ultra-modern clubhouse.

Barely a year after its members voted in favour of a $60-million facility at SICC’s Upper Thomson Road location, the management has revealed that it estimates the cost to now reach $90.3 million – an increase of over 50 per cent. This far exceeds the 5 per cent contingency that was set aside earlier.

In a circular dated May 23 sent to all its 7,500 members, SICC – Singapore’s largest golf and country club – said that the clubhouse plans have been affected by rising construction costs due to a shortage of building material and manpower.

An extraordinary general meeting (EGM) will be held on June 9 for members to discuss the revised budget before they cast their votes.

Work on the 25,000 sq m clubhouse – which will feature a spa, wellness centre and restaurants, among other facilities – began last September and is expected to be ready by mid-2010. In last week’s circular, the SICC assured members that the project was on target to be completed on time.

The original $60 million budget was first approved at an EGM in April 2007, with 86 per cent of the 543 members present that day giving their approval.

The new, estimated budget of $90.3 million includes a revised project cost of $81.1 million and an additional $9.2 million for improvements to architectural and mechanical and engineering works, said the circular.

At the June 9 EGM, the management is also trying to seek approval to spend another $21.1 million on an extra list of ‘proposed enhancements’ such as restaurants and 30 residential guest suites, extra car park lots and more features for the existing golf courses.

This would bring the total upgrading costs to nearly $114.5 million.

‘The suggested enhancements will bring about a new club experience, one that is unique to members of the club. This project, if voted in its entirety, will complete the long-awaited redevelopment of the Island location (at Upper Thomson),’ SICC president John Kirkham wrote in the circular.

But while SICC reportedly has reserves of more than $500 million, some members that BT spoke to have their reservations about whether the club’s heavy spending on upgrading works will eventually be passed down in the form of higher subscription fees, which are currently $130 a month.

One member, who spoke on condition of anonymity, said: ‘Do we really need such a fancy clubhouse, given that this is a time when everyone is in a squeeze as far as labour costs are concerned? Why are we doing so much at the peak of the market when costs are so high, rather than wait for things to cool down?’

One long-time member, however, was in favour of the upgrading as he felt it would enhance the value of the club membership even further. The current transferable membership price is $205,000.

Several efforts to reach SICC chief executive officer Sylvan Braberry for comment were unsuccessful.

Meanwhile, apart from the new clubhouse, members also recently gave the green light to upgrade the two golf courses at SICC’s other location at Sime Road.

The works are estimated to cost about $55 million.

Source : Business Times – 3 Jun 2008

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