Two deals with a combined value of $676.5 million were announced yesterday in yet another sign of the continued resurgence in the collective sale market.
One involved the sale of Rio Casa, a privatised HUDC estate in Hougang, while mixed-use development Goh & Goh Building, near Beauty World MRT station, was also snapped up. These follow the sale of One Tree Hill Gardens for $65 million to Lum Chang Group this month. The number of deals has now matched the three done in all of last year: Shunfu Ville, Raintree Gardens and Harbour View Gardens.
Brisk new-home sales and the recovering sentiment in the residential property market have fuelled demand for sites among developers.
Rio Casa in Hougang Avenue 7 was sold for $575 million to the joint venture firm Oxley-Lian Beng Venture comprising KSH Development, Oxley Holdings, Lian Beng Group and Apricot Capital.
“We received a handful of submissions for Rio Casa; it was hotly contested,” said Mr Ian Loh, head of investment and capital markets at Knight Frank, the project’s marketing agent. The intention is to apply for the grant of a fresh 99-year lease for the property and to redevelop it, the consortium said in a separate stock exchange filing yesterday.
It would have to fork out a further $208 million in estimated differential premiums for topping up the lease and to develop the site to a gross plot ratio of 2.8. Knight Frank noted that the combined sale price and differential payment translates to a land price of about $706 per sq ft per plot ratio based on the maximum permissible gross floor area of about 1.1 million sq ft.
Rio Casa comprises seven blocks of 286 apartment and maisonette units. Each owner stands to pocket about $2 million from the deal.
“The gross development value for this project is estimated at $1.4 billion and can potentially be redeveloped to build about 1,400 residential units, assuming an average size of 70 sq m per unit,” Mr Loh added.
Separately, Alika Properties – a unit of BBR Holdings – exercised a call option yesterday to buy the Goh & Goh Building for $101.5 million. Built in the late 1980s, the freehold property at 110 to 122 Upper Bukit Timah Road comprises seven apartments and seven shops. Marketing agent JLL said that each shop owner will reap about $9 million while apartment owners will get $5.4 million each. “Subject to Alika’s payment of a development charge, the site can potentially yield about 100 residential units and a level of retail shops on the ground floor,” said BBR Holdings.
Activity in the collective sale market is expected to gather pace.
“There are about 25 to 30 projects in the market right now that have elected sales committees and are looking at collective sales,” noted Mr Tan Hong Boon, JLL’s regional director for capital markets here.
JLL is marketing five collective sale projects: Amber Park, Florence Regency, Brookvale Park Condominium, Boon Teck Tower and Cavenagh Gardens.
Consultancy CBRE said the collective sale projects it is working on – Villa D’Este and Cairnhill Mansions – may be ready for sale in the third quarter.