Four years after the collective sale committee at Shunfu Ville was formed, the sale of the Bishan estate has finally got the green light.
The Court of Appeal yesterday dismissed an appeal filed by objectors against the sale of the 358-unit privatised HUDC estate. The sale grabbed headlines last May, when more than 82 per cent of the owners agreed to sell the estate for $638 million to property developer Qingjian Realty.
But the deal hit a snag when some owners objected to the sale last July, later filing an appeal to the High Court. One objection queried if the transaction was done in good faith, taking into account the sale price.From 2015, the sale committee had launched two public tenders, both at a reserve price of $688 million. Both tenders did not attract any formal bids, but the committee had been in talks with Qingjian, which had offered $638 million.
The committee later obtained the requisite 80 per cent consent for the sale at $638 million, although it did not call for another public tender at that price, owing to the urgency of the timeline.
The Court of Appeal noted that while the “committee was in somewhat of a rush, there was nothing to suggest an absence of good faith or impropriety in the transaction”.
It said the committee signed a private treaty with Qingjian, as “failing to commit to Qingjian not only did not assure that a better offer would come along” but could also have meant “the loss of Qingjian’s offer”.
Dentons Rodyk & Davidson senior partner Lee Liat Yeang, acting for Qingjian, said the ruling was significant in clarifying the law in this area, and would give greater confidence to developers looking to buy land through collective sales.
Mr Li Jun, Qingjian Realty managing director, said he was pleased that the deal had gone through and added that Qingjian now faces higher development charges of some $50 million. The charges are levied by the Government on developers who intensify land use. They are revised twice a year and could affect profit margins, he said.
Qingjian plans to build about 1,000 homes on the Shunfu plot, expected to be a mix of high-rise units of up to 25 storeys and landed units. The development will be launched a year from now, said Mr Li.
With the conclusion of the sale, each flat owner will pocket an average of $1.782 million. The Straits Times understands that the sale is expected to be completed in July, and owners will move out six months from then.