Former HUDC estate at Potong Pasir could be put up for collective sale

Another privatised former HUDC estate could go on the market soon following the landmark sale of Bishan’s Shunfu Ville for $638 million in May.

Sources say owners of the 175-unit Raintree Gardens in Potong Pasir Avenue 1 have got the minimum consent level required for the site to be launched for sale.

The 201,405 sq ft plot, next to Kallang River and near Potong Pasir MRT station, has just over 70 years of lease left. It is zoned for residential use with a 2.8 plot ratio.

Property experts believe the owners could get over $315 million, or about $1.8 million per unit.

Including the sum a developer would pay the Government to build a larger project and top up the lease, the price could be some $430 million, or $760 per sq ft per plot ratio (psf ppr). The collective sale attempt is a first for the estate, which was privatised in July 2014. JLL is marketing the sale.

“While there has been one substantial en bloc sale, Shunfu Ville, one sale doesn’t really make a market,” said Ms Christina Sim, director of investment sales at Cushman & Wakefield. “That said, there are not many good plots in the market right now, and there is still room for more projects in Potong Pasir. It is an up-and-coming area, and most of the new developments there sell well.”

For instance, MCC Land’s nearby mixed-use The Poiz Residences has sold 74 per cent of 731 units.

Going by recent bullish bids at Government Land Sales (GLS) tenders such as the Martin Place site, there is certainly demand for plum residential sites, though the price must be right, she added.

As the Raintree Gardens site is within walking distance of the MRT station, it has easy access to the city. Another plus point is the nearby Bidadari estate – set to include a 10ha park with Alkaff Lake.

It is also near St Andrew’s Village, which includes primary and secondary schools as well as a junior college on one site.

Recent sale sites in the area include that of The Poiz Residences, which went for about $775 psf ppr in August 2014. A site in Lorong Lew Lian, now The Venue Residences by City Developments, went for about $710 psf ppr last November.

Industry experts get lots of requests to assess potential collective sale sites but it is a tough balance to price sites correctly, said Mr Lee Liat Yeang, a senior partner at Dentons Rodyk & Davidson.

“It will not be easy to sell an en bloc site if it is priced too adventurously for a developer. But if owners don’t price more aggressively, they may not be able to get the 80 per cent minimum consent level for the sale.”

Developers seeking en bloc sale sites must also factor in the longer pre-construction period, he said. After buying, a developer must apply to the Strata Titles Board, seek guidance from the High Court if needed and allow residents to stay rent-free for six months before it can begin redevelopment.

“All these eat into a developer’s schedule and must be factored in when he prices the land,” Mr Lee said.

Developers buying a GLS site can get a project ready to sell about a year from winning a tender.

A Raintree Gardens resident who gave his name as Kah Hoe, 25, said that while the area was nice and units spacious, the price is good enough for his family to sell.