Published February 8, 2006
Alexandra Centre put up for collective sale
ALEXANDRA Centre has hit the market for collective sales, making an entry with a $40 million asking price.
$40m asking price: The existing two-storey building, which is about 25 years old, houses 12 ground-floor shops and 12 apartments
This works out to $270 psf per plot ratio inclusive of an estimated $1.153 million development charge.
The freehold property on Alexandra Road is zoned for residential with commercial use on the first storey. It may be redeveloped to a height of four storeys with a maximum 3.0 plot ratio - the ratio of potential gross floor area to land area.
Alexandra Centre has a land area of 50,838 sq ft. The existing two-storey building, which is about 25 years old, houses 12 ground-floor shops and 12 apartments.
Owners controlling more than 80 per cent of share values have consented to the collective sale, which is being handled by CB Richard Ellis.
Based upon $40 million, apartment owners will receive about $1.1 million each, and the shopowners about $2.1 million each.
'This is about 100 per cent more than the price which the units can achieve if they are sold individually,' says CBRE executive director Jeremy Lake.
Alexandra Centre is within walking distance of Queenstown MRT Station. Nearby landmarks include the Queens condo, Ikea and The Anchorage. The tender for Alexandra Centre closes on March 8.
Published December 14, 2005
En bloc sales hit 5-year high of $1.9b
But rapidly rising price expectations among owners could dampen market next year
By KALPANA RASHIWALA
(SINGAPORE) With just two weeks to go before year's end, the value of collective property sales done so far has hit $1.9 billion. This is more than double the $722 million chalked up for the whole of last year and is the highest level in at least five years.
The strong uptrend captured in the latest figures compiled by CB Richard Ellis and released to BT reflects a happy convergence of the price expectations of both sellers and buyers.
Owners, however, are becoming more optimistic in their price expectations and there's a risk that they may raise their asking prices too fast for developers. This, warns CB Richard Ellis executive director Jeremy Lake, could significantly dampen collective sales next year.
Agreeing, Credo Real Estate executive director Melvin Poh says many of the deals being structured now are based on future pricing. He also points to a substantial supply of en bloc properties at various stages of readiness in the prime districts like Cairnhill, Angullia Park, Orchard Boulevard, Kim Yam, St Thomas Walk, Ardmore Park and Nassim.
'There's a lot of supply coming out. Not all will be sold. Developers don't have unlimited funds. So the key is speed. The race is on to get your collective sale organised quickly and put it on the market early.'
Collective sales, under which the owners in an estate team up to sell their homes to a developer, have been a closely watched phenomenon among Singapore property investors since 1994. These en bloc deals have arisen due to an increase in plot ratios, which specify the intensity permitted by the planning authority for a property development on a site.
This has boosted the redevelopment potential of sites, creating an opportunity for owners in an estate to get a higher price or premium if they join forces and sell their properties to a developer instead of going it alone. With improving sentiment, owners' expectations of this 'collective sale premium' have risen.
'Whereas a premium of 30-plus per cent was enough 12 months ago, you now need to look at about 40 to 50 per cent to stand a good chance of getting owners to agree to a collective sale,' says CBRE's Mr Lake.
There have been two bouts of en bloc fever - from 1994 to 1997, and again in 1999-2000. Home owners and property agents hope the current wave will not be short-lived.
Highlighting a key factor behind the impressive performance so far this year, Mr Lake says: 'For many of the deals done this year, the process of collecting signatures from owners began in 2004 or the early part of this year, before sentiment started to improve. So these properties were put on the market with more realistic price expectations from owners.'
On the demand side, developers have raised the prices they are prepared to pay on the back of improving sentiment. The strong demand they have enjoyed from home buyers in the luxury residential segment has led them to speed up replenishing their land banks with prime freehold sites. Collective sales are an excellent source of such supply, notes Mr Lake.
He cites a couple of examples of notable deals. Habitat II, sold in September this year, fetched $103.88 million, surpassing the owners' reserve price of $86 million set last year.
Likewise, Belle Vue was sold in October for $227.28 million, again exceeding the reserve price of $190 million agreed upon by the owners last year. 'Right now, it's competition among developers that has led to reserve prices being surpassed. In the next stage, we'll see whether developers are prepared to pay the higher reserve prices being set by owners,' says Mr Lake.
Owners are certainly starting to become more confident about asking prices. Says DTZ Debenham Tie Leung director Tang Wei Leng: 'In the past few weeks, we've seen cases of owners backing out from prices they had agreed to earlier in their collective sale agreement and jacking up reserve prices by about 10 to 40 per cent.'
This has been partly triggered by last week's tender for the landmark Orchard Turn site, which may include a residential component. It fetched a bullish top bid.
'Basically, we have owners saying things like, 'If a 99-year site (Orchard Turn) can fetch $1,020 psf per plot ratio, surely our plot which is also in the prime district and is morever freehold, should be able to sell for much more than the $800 psf ppr we signed up for',' says Ms Tang.
Wee Cho Yaw firms top en bloc deals
They account for $485m or 25% of $1.9b in collective sales this year
By KALPANA RASHIWALA
COMPANIES in the stable of United Overseas Bank chairman Wee Cho Yaw have been the biggest buyers of collective sale sites this year. United Overseas Land, United Industrial Corp, Singapore Land, Kheng Leong and OUB Centre Ltd have snapped up about $485 million of such properties, or a quarter of the $1.9 billion of collective sales that have changed hands in 2005.
The en bloc sites clinched by companies in Mr Wee's stable include Maryland Park in Katong, Eng Cheong Tower in the Beach Road area, Bo Bo Tan Gardens/Mansion off Kim Tian Rd, Parry Gardens, Oasis Garden in Paya Lebar and a collective sale at Minbu Rd in the Balestier area.
Other big shoppers who have picked up sites in the en bloc market this year include Wing Tai, Sim Lian, MCL Land and Bukit Sembawang. Wing Tai clinched two prime district sites - Belle Vue at Oxley Walk for $227.28 million and Phoenix Mansion in Cairnhill for $57.9 million.
MCL Land bought Balmeg Court atop a hill in Pasir Panjang and Fernhill Place.
The most expensive collective sale site this year in terms of unit land price was Habitat II at Ardmore Park. Wheelock Properties paid $876 per square foot per plot ratio for the site in September this year, about 30 per cent more than the $671 psf ppr that nearby Falcon Crest fetched a year earlier.
The most expensive collective sale site this year in terms of unit land price was Habitat II at Ardmore Park, clinched by Wheelock Properties
Another prime district site, Belle Vue in Oxley Walk, sold for $666 psf ppr this year, or 35 per cent higher than the $492 psf ppr that Quelin Gardens in the St Thomas Walk area went for last year.
However, such increases in land prices were exceptional. Most en bloc sites sold this year registered much more modest increases in land prices, property consultants say.
An interesting deal this year was the conclusion of the maiden collective sale of a 99-year property - Eng Cheong Tower in January.
Subsequently, only one other 99-year property has changed hands through a collective sale, Evian Condominium in Holland Rd, although two more are still on the market - Waterfront View facing Bedok Reservoir and Amberville in Katong, both privatised HUDC estates.
Basically, developers who buy such sites will have to pay a sum to the state to top up the lease of the site to the original 99 years, besides the usual development charge/differential premium to tap a higher plot ratio. 'So there are two sets of payments the developer has to make to the state, leaving less money that it can offer to the owners. That reduces the incentive for owners to go en bloc for 99-year estates compared with freehold ones,' a property consultant said.
As well, many of the privatised HUDC estates are huge, with hundreds of owners. This makes it harder to get the minimum 80 or 90 per cent consent levels for an en bloc deal.
Also, because these sites are huge - Waterfront View, for instance, can be developed into a new project with about 1,400 units - developers are more cautious when bidding, because of the risk of being stuck with a big project for years, especially if oversupply develops in the area.
'This again translates to lower bids from developers for such sites, reducing the incentive for owners to agree to a collective sale,' said a property consultant.
Published January 11, 2006
Angullia Mansion up for collective sale again
Owners said to be asking for $108m, slightly more than the top bid in 1999
ANGULLIA Mansion, a stone's throw from Orchard MRT Station, is back on the collective sale market - and this time the owners are said to be asking for $108 million or about $960 psf of potential gross floor area including a development charge of about $12.5 million.
Owners of 20 of the 21 apartments are understood to have signed the collective sale agreement. The last owner is expected to do so soon.
This is slightly more than the $105 million top bid the freehold property drew when it was previously put on the market in late 1999. The requisite approval level from majority owners could not be secured then. But this time around, owners of 20 of the 21 apartments are understood to have signed the collective sale agreement at a price of about $108 million. The last owner is expected to do so soon.
Keck Seng group, which is said to own four apartments at Angullia Mansion, has consented to the collective sale.
A price tag of $960 psf per plot ratio (psf ppr) is about 10 per cent higher than the highest unit land price fetched for a collective sale last year - $876 psf ppr for Habitat II. However, DTZ Debenham Tie Leung, which is marketing Angullia Mansion, has set its sights on an even higher benchmark - the $1,020 psf ppr at which the 99-year leasehold Orchard Turn site was sold to CapitaLand and Sun Hung Kai Properties last month.
CapitaLand has since given a breakdown of its bid, imputing a land price of $1,130 psf ppr for the project's retail component which will make up 70-75 per cent of total gross floor area, while the land value for the residential component is a lower $700 psf ppr.
Angullia Mansion has a land area of 44,730 sq ft. The site is zoned for residential use with a 2.8 plot ratio under Master Plan 2003. The maximum height is 36 storeys.
The site can accommodate about 56 units averaging about 2,000 sq ft. DTZ is expecting strong demand for the site given the improved take-up rate for luxurious and lifestyle apartments. In the vicinity, units in SC Global's BLVD project fetched prices of as high as $2,200 psf in October last year, DTZ pointed out in a statement.
The tender for Angullia Mansion closes on Feb 9.
The Vermont up for collective sale
Tender for the freehold site closes on March 3
By KALPANA RASHIWALA
THE owners of The Vermont at Peck Hay Road in the Cairnhill area are the latest to put up their prime district homes for collective sale, tapping the current uptick in the luxury residential market.
The Vermont comprises two apartment blocks at 9 and 11 Peck Hay Road in the Cairnhill area. The project was built in the mid-1980s.
The indicative price for the freehold Vermont is about $76 million, translating to $750 per square foot of potential gross floor area inclusive of an estimated development charge of $9 million. Based on this, a new condo on the 40,375 sq ft freehold site could break even at about $1,100 psf, say analysts.
CB Richard Ellis, which is handling the sale of The Vermont, says recent collective sale transactions in District 9 include Emerald Lodge at $803 psf per plot ratio (psf ppr) and Habitat II at $876 psf ppr.
The Vermont site is zoned for residential use with a 2.8 plot ratio and a maximum height of 20 storeys under Master Plan 2003.
The tender for The Vermont closes on March 3.
Property agents and home owners in the prime districts have been busy launching collective sale tenders, riding on the current upturn in sentiment in the luxury housing segment. That has improved developers' appetites for replenishing their landbanks.
Recent launches include Eng Lok Mansion near Botanic Gardens, Angullia Mansion near Orchard MRT Station and Kim Yam Mansion off River Valley Road. In addition, there is a slew of properties at various stages of readiness for an en-bloc sale launch in the prime districts like Cairnhill, Angullia Park, Orchard Boulevard, River Valley, St Thomas Walk, Ardmore Park and Nassim, say property consultants.
With a relatively huge potential supply of en-bloc sites slated for release this year, and finite demand from developers, the race is on to get collective sales organised quickly and tenders launched as soon as possible.
The Vermont comprises two apartment blocks at 9 and 11 Peck Hay Road. The project was built in the mid-1980s.