Members pay S$19,000 each to extend TMCC lease
http://www.businesstimes.com.sg/life...end-tmcc-lease
Members pay S$19,000 each to extend TMCC lease
Leases for Garden and Tampines will be extended beyond 2021 expiry, subject to lease renewal premium
Saturday, February 11, 2017
by Chai Hung Yin
[email protected]
@ChaiHungYinBT
TANAH Merah Country Club (TMCC) is asking its members to cough up S$19,000 each, excluding goods and services tax (GST), in a bid to extend the land lease of its golf courses.
Those who pay the top-up contribution will be able to extend their club membership for another 19 years to Dec 31, 2040.
Otherwise, the membership will expire on Dec 31, 2021 - the current land lease expiry date for both the Garden and Tampines locations.
The members have been given two months to consider, and to submit their application forms to the club before 5pm on April 8.
The club has previously paid a lease premium of S$67.3 million for a 30-year lease from Jan 1, 1992, to Dec 31, 2021, for both golf courses.
Although the Singapore Land Authority has agreed to renew the land leases of the Garden course until 2035 and the Tampines course until 2040, it is subjected to a payment of a lease renewal premium, the club said.
In a letter to members on Feb 9, the club said the lease renewal premium for the Tampines location is S$30.1 million, with an additional premium of about S$1million set aside for additional gross floor area. The lease renewal premium for the Garden course at Changi Coast Road is estimated at S$15 million.
To meet the government mandate to be self-sufficient in water supply, among others, the Tampines course at Xilin Avenue has been closed for redevelopment since Jan 3.
Besides enlarging the existing lakes, the club also plans to create an entirely new 18-hole Championship course. It will reopen in March 2018.
Meanwhile, the Garden course is affected by the expansion of East Coast Parkway (ECP) which is slated for the third quarter of 2018.
About 10 hectares of land and nine front holes will be affected, thus will likely necessitate a complete revamp of the course. The current plan is to reconfigure it into a 18-hole golf course and construction is likely to start after plans for the ECP expansion are finalised, the club said.
In total, the redevelopment of both courses will cost S$78 million.
In order to raise funds to cover the lease extension and redevelopment costs, the club has made a "one-off" offer for subscribing members to convert their memberships to an Ordinary membership at a concessionary conversion fee of S$53,500, including GST.
However, memberships converted through this offer cannot be transferred within the first five years after conversion, until after Jan 30, 2022.
So far, the club has collected S$5.65 million from the concessionary conversion fee offer, which helps to offset some of the costs.
With a cash reserve of S$96 million as at Dec 31, 2016, and a working capital and funds for fixed assets replacements at S$22 million, the total shortfall that the club faces comes up to S$44.45 million.
Members of TMCC whom The Business Times spoke to are likely to extend their membership.
Shapy Khan, 52-year-old managing director of postal company Postlink, said it is a lifestyle choice despite the higher-than-expected top-up fee. "Since I hope to be able to play golf into my 70s, this is something I have to do."
The days of club membership as an investment has long gone, he added.
"There are a lot of uncertainties these days. With this top-up, there is no guarantee that it will not be taken away," said Mr Khan, referring to Raffles Country Club and Jurong Country Club, which were acquired to make way for the Kuala Lumpur-Singapore high-speed rail.
