Former HUDC estate Rio Casa to be up for en bloc sale
Reserve price said to be about S$450m; it will cost another S$200m to top up the lease and intensify the plot ratio
Saturday, March 25, 2017
by Lee Meixian
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@LeeMeixianBT
Given the total 286 units at Rio Casa, residents are hoping to get about S$1.6 million per unit from the sale.
AMID the recovering market sentiment, Rio Casa, a privatised HUDC estate at Hougang Avenue 7 (formerly called Hougang N3), has reached the requisite 80 per cent consent needed for a collective sale.
The sales committee is targeting to launch the estate for sale by tender in April. The tender will likely be open for a month.
When contacted, Ian Loh, head of investment and capital markets at Knight Frank, which is the marketing agent, said: "It is absolutely fantastic that we obtained 80 per cent consensus in less than three weeks."
Although Mr Loh declined to disclose the reserve price, The Business Times understands from a source that it is about S$450 million. Given the total 286 units, residents are hoping to receive about S$1.6 million per unit.
Mr Loh said it would cost the incoming developer about S$61 million to top up the lease from the remaining 73 years to 99 years, and another S$141 million to intensify the plot ratio to 2.8. This ultimately translates to a land price of about S$590 per square foot per plot ratio.
But property consultants warn that the reserve price could be slightly too bullish as there are factors about the site that could make developers cautious in their bids.
One of them is the land area of 396,231 square feet. With a plot ratio of 2.8, the site could potentially yield more than 1,000 homes - quite intimidating for any developer to move, JLL's Singapore research head Tay Huey Ying said.
The option of bulk sales to clear unsold stock has also diminished with the recent introduction of the Additional Conveyance Duty, a new form of stamp duty for the transfer of equity interest in entities holding residential properties in Singapore.
Developers will also continue to feel pressured by the five-year timeline they have to finish selling their units in order to qualify for additional buyer's stamp duty remission.
This is despite developers' growing appetite for residential land, particularly with the steadily declining inventory of unsold units amid improving buyer sentiment, and limited sites available in the government land sales (GLS) programme, Ms Tay said.
Nicholas Mak, executive director at SLP International, also thinks that residents may need to temper their expectations slightly. "From the developers' perspective, if they must pay the owners plus the government more than S$600 million, with that same amount of money, they can buy almost two land parcels from the GLS programme.
"Developers are ready to get back into the enbloc market, but the moment the quantum gets a bit too big, like above S$400 million, the number of interested parties that can match the price dwindles."
The site location, while not within walking distance of any MRT station, is very near Sungei Serangoon and has a river view. There is also not much new supply coming up in the vicinity except at Fernvale Road, about five kilometres away, where a Sing Holdings-Wee Hur partnership last year clinched a plot of land in a state tender to build private housing.
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