More estates get in on collective sale action

The collective sale rush continues apace with one estate about to makes its fourth attempt, another inching towards the green light from owners and a third hitting the market today.

The most immediate candidate is How Sun Park, a freehold property in How Sun Road and near the upcoming Bidadari township.

It is released for sale today with an asking price of $78 million that would deliver substantial returns for owners, given prevailing market prices. The tender closes on Nov 28.

Pearlbank Apartments, the well-known horseshoe-shaped building in Outram, will go on the market in two weeks, in its fourth attempt in 10 years. Its asking price of $728 million could also reap owners a huge premium over market values.

And the 660-unit Pine Grove near Ulu Pandan Road has begun collecting signatures for the 80 per cent mandate after about half of the owners at the former HUDC estate voted in favour of the collective sale agreement on Sunday.

They want to launch a collective sale – their third attempt – with an asking price of at least $1.63 billion. That price tag would easily eclipse the record $1.34 billion reaped by the 618-unit Farrer Court in 2007.

The sale fever is not confined to the residential sector. City Plaza, an 18-storey freehold building with 450 units, including 66 apartments, will hold its extraordinary general meeting for the formation of the collective sale committee tomorrow.

There will be much interest in Pearlbank among developers, given the estate’s location near Pearl’s Hill City Park, Outram Park MRT station and the Central Expressway, as well as its potential as a redevelopment site. The 82,376 sq ft site has an existing gross plot ratio of 7.4479, so it could yield 730 new homes with an average size of 800 sq ft.

The 280 apartment owners, whose unit sizes are from 1,323 sq ft to 3,993 sq ft, could get between $1.8 million and $4.9 million. The eight commercial owners, whose units are from 700 sq ft to 5,630 sq ft, could get from $1.2 million to $6.9 million.

Ms Cecilia Seet, who bought an apartment there in 1997, said: “Given the age of the building, it needs a lot of maintenance and repair. I feel that the reserve price is fair and I know most of the owners think the same. It is better for us to sell collectively, compared to selling individually, as it is more profitable.”

Marketing agent Colliers International said the owners could get a collective sale premium of more than 55 per cent. “The reserve price of a three-bedroom unit is about $2.5 million, compared with the last transacted price of a similar-size unit at $1.6 million two months ago,” Colliers managing director Tang Wei Leng said.

The 37-storey development has a 99-year leasehold tenure with effect from June 1970. It was put up to be sold en bloc in 2007, 2008 and 2011 – but there were no takers.

Sale committee chairman Alex Poh said: “We started the signing process on July 8 and have achieved the necessary signatures in under four months, which is significantly faster than our previous rounds.”

Its reserve price translates to a land cost of about $1,505 per sq ft per plot ratio (psf ppr), after factoring in an upgrading premium of about $195 million for the lease top-up. There is no development charge payable. The tender is expected to close before the end of the year.

The numbers are more modest at How Sun Park, a 20-townhouse property near Bartley MRT station, though the possible gains for owners could be substantial. It is asking for at least $78 million or a land rate of $1,052 psf ppr, including a development charge of about $2.92 million.

Each unit owner could get at least $3.9 million, compared with $1.9 million if they sell on the open market, Mr Sieow Teak Hwa, managing director of marketing agent Teakhwa Real Estate, told The Straits Times.

He said one owner bought a townhouse for less than $1.9 million three months ago. “She was happy to sign the collective sale agreement immediately after completing her purchase. She felt the proceeds from the (collective sale), despite the seller’s stamp duty payable, is a huge bonus for her,” he added.

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