Pine Grove could well emerge as Singapore’s largest en bloc deal, going by its indicative reserve price of S$1.65 billion – a level that would trump the record of S$1.34 billion set in 2007 by Farrer Court, another former HUDC estate.
The owners of Pine Grove, a 660-unit estate off Ulu Pandan Road, have appointed Huttons Asia as their marketing agent, and are now hiring lawyers to work on the collective-sale agreement.
An extraordinary general meeting is to take place on Oct 29 to approve the agreement, which will require the consent of at least 80 per cent of the owners for a go-ahead to launch a public tender.
With 66 years left on its lease, Pine Grove is making a third attempt at an en bloc sale, after unsuccessful attempts in 2007 and 2011. Its reserve price in 2011, S$1.7 billion, did not receive bids from developers.
The current minimum reserve price translates to an estimated land rate of S$1,137 per square foot per plot ratio (psf ppr). This includes differential premiums for intensifying land use to its designated plot ratio of 2.1 and for a lease top-up to a fresh 99-year lease.
Each owner is looking at receiving between S$2.08 million and S$2.64 million; units in the project range from 108 sq m to 180 sq m.
In the year to date, seven collective sales with a residential component worth more than S$3 billion have been sealed. Another seven sites have been launched for tender with an aggregate asking price of S$2.61 billion; another 50 to 60 sites are said to be in various stages of the en bloc process.
Market watchers say the huge size of the Pine Grove estate, spanning more than 893,000 sq ft, may attract a consortium of developers to bid jointly for the site in order to spread their risks.
Including differential premiums for the development, the overall land cost would work out to over S$2 billion – a quantum that not many developers can stomach, said a veteran consultant.
JLL regional director of capital markets Tan Hong Boon estimates that the site could yield more than 2,400 new homes. “Anyone looking at such site will likely be a big developer or a consortium,” he said.
Kogi Murthi, who chairs the Pine Grove’s collective-sale committee, said Pine Grove residents feel “the time is right to embark on a collective sale, while the property market is on its way up”.
“We can expect a good response from developers because of our prime location,” she added. “This is among the few plots left available for residential development in the choice Holland Road district.”
Given Singapore’s qualifying certificate (QC) rules that deter hoarding of land by foreign developers – defined as developers with at least one foreign shareholder and/or director – such developers have to complete the project within five years and dispose of the completed units within two years, or incur extension charges on a pro-rated basis.
Even more punitive is another rule for developers who buy land for residential development – they have to complete building and selling all units in a project within five years to qualify for ABSD (additional buyer’s stamp duty) remission on land cost.
Projects such as The Interlace in Depot Road and d’Leedon off Farrer Road, which were built on large sites sold during the 2007 en bloc boom, still have unsold units. (The Interlace sits on the former Gillman Heights site, and d’Leedon, on the former Farrer Court site.)
About 12,000 new private homes could potentially be generated from the 10 residential collective sales that have been transacted since last year and from another seven sites which have been launched, but the tenders for which have yet to close or be awarded, JLL estimated.