You might have heard that Huang Youlong—the billionaire husband of actress Vicki Zhao—forked out nearly $28 million for a mega-penthouse at Ardmore Park in April 2020. Although the transaction raised eyebrows mostly for it happening in the middle of the Covid-19 pandemic, 99.co found out that, from a property standpoint, there are more dramatic details about the transaction than initially meets the eye.
First, a brief background about the couple
Aside from holding their native Chinese passports, Huang Youlong and Vicky Zhao are both Singapore Permanent Residents (PRs) who tied the knot here in 2008.
At that time, Huang was company director and Zhao was probably still best-known for her role in the drama “My Fair Princess” back in the late 90s. The couple made quite a bit of their fortune from a deal with another (much) richer guy, Alibaba’s Jack Ma, back in 2014.
In 2017, the 44-year-old businessman and the 43-year-old actress found themselves in the wrong kind of news; they were fined and barred from trading in China’s securities markets for five years after the country’s financial watchdog found that they “deliberately misled stock investors” by providing false information.
A year later in 2018, Chinese authorities followed up by banning the duo from serving in key positions at any listed company for five years.
One could say they’re just investors right now, one of those signature uber-rich couples with a mountain of passive income and kids in tow (a 10-year-old daughter and a newborn girl, both born in Singapore).
Huang’s new penthouse at the freehold Ardmore Park condominum sits on the 29th floor. The unit cost him $27.65 million to be exact but, strictly speaking, this isn’t their most expensive property purchase. In 2011, the couple had bought Château Monlot, a winery in France’s Bordeaux region, for 40 million Euros (about $70 million Singapore dollars at the time).
At Ardmore Park, Huang already owns at least one other unit (believed to be a four-bedder on a low-floor), and it turns out that this latest transaction isn’t without its own dose of drama.
Are you ready?
Dramatic detail #1: Huang took 3 years to ‘seal the deal’ on his Ardmore Park penthouse
According to the initial report by The Business Times, Huang was actually granted the Option to Purchase (OTP) by the seller of the penthouse way back in April 2017.
For those who don’t know, an OTP has about the same function as a packet of tissue paper at a hawker centre. An interested buyer pays a deposit to the seller (typically 1% of the purchase price) in exchange for the OTP, so no one else can make another offer during the period that the OTP is effective. This period is known as the option period.
Typically, the option period for a resale condo transaction is 14 days. Long enough for the seller to secure the financing needed, but not so long in that the seller would lose out if the buyer changes his/her mind or is unable to buy for some reason or another. Now check this out:
Standard option period: 14 days Huang’s option period: 1,096 days
Now we’ve been in the property business for a long time and we have come across some weird stuff, but we haven’t heard of an OTP granted/extended for three whole years.
Although technically a resale condo OTP can be valid for as long as both the buyer and seller can agree upon, the property agent of the seller would actively advise against giving a longer option period than the typical 14 days, simply because 14 days would be sufficient time for a committed and financially-able buyer to finalise the purchase.
IF the buyer requests a longer option, then he/she must be prepared to pay a larger deposit, say 2% for a one-month-long option period. An extended OTP suits foreign buyers like Huang, who might require more time to secure financing as a non-local, amongst other logistical and administrative tasks that could take more time.
But this is three whole years we’re talking about. If the seller of the Ardmore Park penthouse were to scale the deposit proportionately to the option period, Huang’s three-year OTP would involve a 78% deposit. That would’ve been crazy, and probably not what happened.
It turned out that the seller, RB Capital’s CEO Kishin RK, had received Huang’s unsolicited offer to buy the unit shortly after he took ownership of it back in April 2017. Kishin, who would’ve had to bear a Seller Stamp Duty (SSD) if he were to sell the penthouse within three years of taking ownership, told the Business Times that Huang’s offer was “too good to refuse”.
And so a lengthy OTP was drawn up, and the deposit required of Huang was likely far lower than 78% of the purchase price. It is likely that Huang offered to pay a deposit equivalent to the sum total of the rental for the unit for three years (or slightly higher):
Deposit of 1% of purchase price for a standard 14-day option period: 1% x $27.65 million = $276,500 Deposit equal to 3 years worth in rental: $30,000 x 36 months = $1,080,000*
*about 3.9% of the purchase price.
Imagine Huang wanting that penthouse so much that he pays rent without getting to live there (because it’s just an OTP)—that’s desire for you.