PDA

View Full Version : Developers revive interest in unsold collective sale sites



mr funny
11-01-07, 20:11
Top Print Edition Stories
Published January 11, 2007

Developers revive interest in unsold collective sale sites

Analysts cite record prices for prime housing sites, high-end boom

By KALPANA RASHIWALA


(SINGAPORE) The continuing surge in the high-end residential sector and record prices for prime housing sites are reviving developers' interest in collective sale sites that were not sold last year, players say.


http://img275.imageshack.us/img275/5158/bt544323011012007hz2.jpg
Horizon Towers: The asking price of $820 psf ppr now works out to just half that for Parisian. An offer is said to be on the table.


'In late December we had news of The Parisian, a freehold property in Angullia Park, fetching a record price of $1,734 psf of potential gross floor area including development charges (DC),' a seasoned player told BT.

'That was like 25 per cent more than the previous en bloc sale record - $1,369 psf per plot ratio for Ardmore Point set in October. So other en bloc deals whose asking prices seemed steep just a month ago suddenly look attractive.'

A case in point is leasehold Horizon Towers in the Leonie Hill area. Its owners are asking $500 million, which works out to about $820 psf per plot ratio including a payment the successful bidder will have to make to the state to upgrade the lease to 99 years.

This looked expensive for a leasehold site when the tender closed in August last year. 'But now it's like just half the unit land price for Parisian,' said a consultant. 'All of a sudden, Horizon Towers doesn't look that expensive for bidders with deep pockets.'

Industry sources say a joint venture, involving a local developer and a fund, recently placed an offer that meets the $500 million asking price. Lawyers representing Horizon Towers' owners are said to be evaluating the terms and conditions set by the potential buyer and if these can be agreed on, the site is likely to be awarded.

In the meantime, though, other developers may be considering whether it is worth making a fresh offer for the sprawling 204,742 sq ft site, which has a remaining lease of about 71 years.

Apparently, the owners of Grangeford - another 99-year leasehold property in the vicinity - are said to be raising their reserve price about 25 per cent to $350 million from $280 million last year. And as a result of this, many more owners are now coming forward to sign the collective sale agreement.

'It is much more difficult to get the minimum 80 per cent approval level from owners these days, and it may be necessary perhaps to revise upwards the reserve price during the signing process to persuade at least 80 per cent of owners to join in - because of all the positive media coverage on the property market recovery,' says CB Richard Ellis executive director Jeremy Lake, whose firm is marketing Grangeford. Property consultants told BT it is not just collective sale sites in the Orchard Road area that are seeing a revival in interest.

Colliers International has just relaunched Flamingo Valley at Siglap Road. Owners are now more sanguine about achieving their reserve price - understood to be about $425 psf per plot ratio inclusive of development charges - following the sale of East Coast Ville along Upper East Coast Road late last month to UOL Group at a unit land price slightly above $400 psf ppr.

'Previously we could not cross the $400 psf ppr mark for sites in the location like Flamingo Valley,' said Colliers director of investment sales Ho Eng Joo. 'Now we're starting to do so.'

Riding on the improving sentiment in the location, Colliers is also launching Ocean Apartments at East Coast Road with a $38 million or $468 psf ppr price tag.

Credo Real Estate managing director Karamjit Singh acknowledges that sentiment among developers looking for replacement sites has improved. His firm recently relaunched the collective sale of The Albany in Thomson Road in District 11. 'While the reserve price that the owners are seeking is still the same absolute dollar price that could not be met last year, the market in the area is definitely hotter right now because of improved sentiment,' he says.

Recent sell-outs of new projects in the Marina Bay area have created 'exuberance in the property market to an extent that it appears market prices right now do not adhere to fundamentals', Mr Singh added.


http://img275.imageshack.us/img275/113/bt537366011012007jo8.jpg
The Parisian: It attracted a top bid of $1,734 psf ppr last December, 25% higher than the previous record set in October for a prime district collective sale.