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Cairnhill Mansions in collective sale bid
Published on Oct 23, 2014 2:14 AM
By Chia Yan Min
THE owners of an ageing District 9 residential property are launching their fourth attempt at a collective sale.
Cairnhill Mansions' 61 owners will begin the process next June with the aim of getting the requisite 80 per cent backing before the option expires a year later.
The 50-year-old freehold building, which sits on a prime site near Goodwood Park Hotel, has 60 apartments and a penthouse.
The last attempt at a collective sale coincided with the rollout of property market cooling measures in 2011.
The owners failed to find a buyer at the reserve price of $361.5 million, or about $2,308 per sq ft of potential gross floor area. Earlier collective sale attempts were in 2005 and 2007.
Sale committee chairman Charles Ho said the building's ageing infrastructure is costly to maintain and can be a hazard: A resident was recently trapped in the lift for four hours.
"Old electrical wirings are hazards. Carpark shortages, inefficient use of space, water seepage during heavy rain are all inconveniences. Replacement costs are high and have to be funded by owners. Even if the place is upgraded, there is a limit to how much it can be brought up to date," he added.
Retiree Andy Lim, 65, who has lived at Cairnhill Mansions for about 20 years, said its antiquated design features can be inconvenient. "The lift lobby is on the second floor, instead of the ground floor," said Mr Lim, adding that he plans to buy a smaller unit in the same area if the en-bloc sale is successful.
Developers are constantly on the lookout for prime freehold sites and collective sales are one of the few ways to acquire such a parcel, said Ms Elaine Chow, executive director and head of research at Chestertons Singapore.
However, "given the lacklustre luxury residential market, developers will not be able to bid as aggressively as before".
Cairnhill Mansions will have to be priced at around $2,000 per sq ft for redevelopment to be viable, added Ms Chow.
If the sale is successful and the land redeveloped, new homes on the site would go for about $2,500 per sq ft, given the sluggish high-end residential market, said R'ST Research director Ong Kah Seng.
Based on that selling price, developers would be willing to pay about $1,500 per sq ft per plot ratio to the building's owners.
Mr Ong added that owners who are "sceptical about how they can make use of the sale proceeds to find a replacement home that is value for money, and of fairly good standards" might hesitate to agree to a collective sale at this price.
Separately, property consultancy CBRE announced yesterday the public tender for Fragrance Court's collective sale, with a reserve price of $70 million or $1,235 psf per plot ratio.
Located 200m from Pasir Panjang MRT station, the 38,220 sq ft freehold site is zoned for residential use under the Government's Masterplan 2014.
The development comprises 32 apartments and owners representing more than the requisite 80 per cent of share value and strata area have consented to the collective sale.
"Given that the neighbouring project, Bijou, achieved an average sale price of $2,120 psf in August, we envisage keen interest from developers," said CBRE's director of investment properties Galven Tan. "The development size is very manageable and will draw in a wide pool of buyers."
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