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Thread: City Plaza En Bloc

  1. #1
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    Default City Plaza En Bloc

    This is not entirely unexpected and a welcome catalyst to further boost Paya Lebar Central area. PPR residents and Phase II folks better watch out for this development. This is FH.

    I can imagine Landlease calling ADIA for a bid as well? Build one more bridge or underground to PLQ. Make it a super mega development.

    http://www.straitstimes.com/business...o-sell-en-bloc

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    Quote Originally Posted by PropVestor View Post
    This is not entirely unexpected and a welcome catalyst to further boost Paya Lebar Central area. PPR residents and Phase II folks better watch out for this development. This is FH.

    I can imagine Landlease calling ADIA for a bid as well? Build one more bridge or underground to PLQ. Make it a super mega development.

    http://www.straitstimes.com/business...o-sell-en-bloc
    Power. And there's already a bridge between City Plaza and One KM also.

    Sounds like a JEM Giant is coming... The 4th would be Tg Katong Complex.

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    They will meet on Saturday to discuss possible collective sale, with asking price of up to $1 billion

    Collective sales fever is spilling into the commercial sector as many City Plaza unit owners prepare for their first annual general meeting in years on Saturday, to discuss a sale with a possible price tag of as high as $1 billion.

    The 18-storey freehold building near Paya Lebar MRT station was completed in 1972 and is known for its wholesale shops, which mainly sell apparel.

    The building has 531 units, including 66 residential units, according to Mr Derrick Chan, a City Plaza unit owner who called for the meeting.

    Mr Chan told The Straits Times yesterday that he did so as "it is the right time now".

    He said: "There is en bloc fever now and Paya Lebar is developing into a business centre. The building is over 40 years old. If we do not go en bloc now, the cost of maintenance will be extremely high."

    Mr Chan, a businessman who owns six units at City Plaza totalling 5,400 sq ft, said most of his units were tenanted, but he did not think that the "trend of wholesale clothing is in our favour".


    "Retail sales are suffering, and wholesale retail is being taken over by (Chinese online site) Taobao. It is not economical to have a shop space and rental is very low."

    Mr Chan added that unit owners are eyeing a sale price of between $800 million and $1 billion. More than 100 people are expected at the meeting. He hopes a collective sales committee can then be formed.

    More than half of the unit owners he has spoken to have expressed interest in a collective sale, he said.

    One of them, Mr James Tan, said rentals have been falling. He bought his 20 sq m unit in the early 1990s and collected a monthly rental of about $1,200. At the peak, he was getting $1,800 but lately, tenants have been seeking rentals of $1,000 to $1,200.

    "Rental rates today are going back to those of the 1990s," he said, adding that even if he were to sell the unit, he did not know if the buyer could get a rental rate that would cover the instalment.

    Dr Lee Nai Jia, head of research at Edmund Tie and Company, said that interest in collective sales of residential properties has spilt into the commercial sector, citing the successful collective sale of Citimac. The freehold industrial complex near Tai Seng MRT station is reportedly being sold for $430.1 million.

    Dr Lee noted that Katong Shopping Centre also launched a collective sales bid earlier this year, but did not manage to meet its reserve price of $630 million.

    "The Paya Lebar area is likely to become a new growth cluster, with Paya Lebar Quarter catalysing the development of the area. Hence, there will be keen interest for City Plaza," he said.

    However, he noted that the asking price range of $800 million to $1 billion is "on the high side", as developers have other viable options.

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    Default Site Area?

    Any idea how big is their site area? Am wondering how they derived the price and how much it works out to per sq ft per plot ratio. The last FH site sold that's comparable would be Lion City I guess.

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    the most difficult issue is the apportionment method to be used between residential and commercial properties

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    That might be a bone of contention and a stumbling block. It would be interesting to see how they work it out. Have there been any other mixed developments of this size that have successfully gone enbloc?

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    The owners' shares based on size of the unit(s) will take care of that. If the sellers are savvy, they will base in on psf of Katong Regency and PLQ as a benchmark estimate. An estate/en bloc broker will make those calculations for them.

    My estimate for this FH mixed development land can be sold for easily above $800 million.

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    I understand they are seeking 800 million to 1 billion. But since residential units have smaller share value usually, I wonder if the price will work out to be good enough for the residential owners as they will likely want a replacement unit in same vicinity. Possibly FH of same or nearly same size. This is a goldmine . FH in this area is extremely hard to come by except by enbloc. As Paya Lebar develops further I think the land price will only increase. I heard from a friend who owns a unit that there are a few owners who own multiple units including Second Chance properties. They need to support for it to succeed.

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    Btw I heard that it's not zoned as Mixed development but rather Commercial. The developer can skip Residential altogether and just build office with retail. Would that get them a better price ?

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    Quote Originally Posted by Tulip09 View Post
    Btw I heard that it's not zoned as Mixed development but rather Commercial. The developer can skip Residential altogether and just build office with retail. Would that get them a better price ?
    A blue commmercial site can have residential, hotel or serviced apartments as a mix. For retail or office use only, I think developers are really missing out. Why? A mixed development provides a risk spread as opposed to 100% commercial. You can read more about this in the PLQ/PPR thread. It's about building an ecosystem within a development that supports each other.

    Some recent blue sites which contained or may contain residence are Beach Road site under tender and also PLQ itself.

    I really hope this en bloc goes through as City Plaza is a real juxtaposition against the upcoming landscape around PLQ. Tanjong Katong complex will hopefully be a hotel connected to the future PLQ office building.

    2 cents,
    PropVestor

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    Will all these developments have spill over effects to bring about price increase in eunos and kembangan areas.?

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    Quote Originally Posted by propertychap View Post
    Will all these developments have spill over effects to bring about price increase in eunos and kembangan areas.?
    If you are one mrt stop away from PLQ, I'm sure there will be some effect on prices. Key question is how much and when which I cannot answer. It all depends on the tenants of PLQ and the success of the overall PLC proposition.

    RCR is different from OCR but microlocation counts more each increasing day.

    2 cents,
    PropVestor

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    The transformation of PL includes the Geylang Serai area so it's likely it will spillover. When the Eunosville site is redeveloped we should see this translate into higher prices for the area. As for CP , developers should find the site attractive as it being a Commercial site they have options. I get what you mean. The Lion City site was also zoned commercial( blue site) and UOL decided to do a mixed development.AXA Tower is up for sale. Of course it's Shenton Way location is superior to CP's but it's LH with 31 years gone. They are asking for above valuation. It would be interesting to see how that goes.

    http://www.businesstimes.com.sg/comp...ess-than-s165b

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    I quite like the kembangan area near the mrt which is not so dense and quiet. The price of the condo there has not moved much. Any one has views on whether it is good to pick up a unit in the older development like kembangan plaza..?

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    Quote Originally Posted by propertychap View Post
    I quite like the kembangan area near the mrt which is not so dense and quiet. The price of the condo there has not moved much. Any one has views on whether it is good to pick up a unit in the older development like kembangan plaza..?
    Kembangan area is like a little Malay village with many middle class living there and with plenty of Muslim food stalls. If you like to embrace the Malay's culture, this is a good place to stay.

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    Quote Originally Posted by propertychap View Post
    I quite like the kembangan area near the mrt which is not so dense and quiet. The price of the condo there has not moved much. Any one has views on whether it is good to pick up a unit in the older development like kembangan plaza..?
    Avoid Kembangan Plaza, the noise from the road and MRT can kill

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    Quote Originally Posted by Laguna View Post
    Avoid Kembangan Plaza, the noise from the road and MRT can kill
    agree, unless proximity to MRT is a primary overriding concern, i'd skip that area and go a bit further cos teluk kurau is a lot more pleasant and quiet.

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    Quote Originally Posted by propertychap View Post
    I quite like the kembangan area near the mrt which is not so dense and quiet. The price of the condo there has not moved much. Any one has views on whether it is good to pick up a unit in the older development like kembangan plaza..?
    My 2 cents advice is to stick with proxy D15 circa the Haig Road area which is still quite close to all the action around PL. I think the prices there have not really moved much and will enjoy the same 'spill over' effect described by you. Having peace and quiet in a built up area near to an MRT Exchange (2 or more lines) is a fallacy.

    D15 still reigns as the highest number of transactions in Singapore and according to Property Guru poll, it is still number one in terms of desirability for the PG poll.

    Why not wait till PPR phase II launch? God knows when they will finally open their showflat again but likely to be till 2018 when the offices and retail mall structures facade are up. PPR will have underground substation access in future which is written by Landlease S&P agreement, not sure that will tickle you?

    PropVestor

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    City Plaza unit owners looking to sell en bloc

    JUL 27, 2017

    They will meet on Saturday to discuss possible collective sale, with asking price of up to $1 billion

    Lee Xin En


    Collective sales fever is spilling into the commercial sector as many City Plaza unit owners prepare for their first annual general meeting in years on Saturday, to discuss a sale with a possible price tag of as high as $1 billion.

    The 18-storey freehold building near Paya Lebar MRT station was completed in 1972 and is known for its wholesale shops, which mainly sell apparel.

    The building has 531 units, including 66 residential units, according to Mr Derrick Chan, a City Plaza unit owner who called for the meeting.

    Mr Chan told The Straits Times yesterday that he did so as "it is the right time now".

    He said: "There is en bloc fever now and Paya Lebar is developing into a business centre. The building is over 40 years old. If we do not go en bloc now, the cost of maintenance will be extremely high."

    Mr Chan, a businessman who owns six units at City Plaza totalling 5,400 sq ft, said most of his units were tenanted, but he did not think that the "trend of wholesale clothing is in our favour".

    "Retail sales are suffering, and wholesale retail is being taken over by (Chinese online site) Taobao. It is not economical to have a shop space and rental is very low."

    Mr Chan added that unit owners are eyeing a sale price of between $800 million and $1 billion. More than 100 people are expected at the meeting. He hopes a collective sales committee can then be formed.

    More than half of the unit owners he has spoken to have expressed interest in a collective sale, he said.

    One of them, Mr James Tan, said rentals have been falling. He bought his 20 sq m unit in the early 1990s and collected a monthly rental of about $1,200. At the peak, he was getting $1,800 but lately, tenants have been seeking rentals of $1,000 to $1,200.

    "Rental rates today are going back to those of the 1990s," he said, adding that even if he were to sell the unit, he did not know if the buyer could get a rental rate that would cover the instalment.

    Dr Lee Nai Jia, head of research at Edmund Tie and Company, said that interest in collective sales of residential properties has spilt into the commercial sector, citing the successful collective sale of Citimac. The freehold industrial complex near Tai Seng MRT station is reportedly being sold for $430.1 million.

    Dr Lee noted that Katong Shopping Centre also launched a collective sales bid earlier this year, but did not manage to meet its reserve price of $630 million.

    "The Paya Lebar area is likely to become a new growth cluster, with Paya Lebar Quarter catalysing the development of the area. Hence, there will be keen interest for City Plaza," he said.

    However, he noted that the asking price range of $800 million to $1 billion is "on the high side", as developers have other viable options.

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    http://www.straitstimes.com/business...t-to-cost-560m

    Hallmarks of turning a blue commercial site to something more exciting. We got to move with the times.

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    Quote Originally Posted by reporter2 View Post
    City Plaza unit owners looking to sell en bloc

    JUL 27, 2017

    They will meet on Saturday to discuss possible collective sale, with asking price of up to $1 billion

    Lee Xin En


    Collective sales fever is spilling into the commercial sector as many City Plaza unit owners prepare for their first annual general meeting in years on Saturday, to discuss a sale with a possible price tag of as high as $1 billion.

    The 18-storey freehold building near Paya Lebar MRT station was completed in 1972 and is known for its wholesale shops, which mainly sell apparel.

    The building has 531 units, including 66 residential units, according to Mr Derrick Chan, a City Plaza unit owner who called for the meeting.

    Mr Chan told The Straits Times yesterday that he did so as "it is the right time now".

    He said: "There is en bloc fever now and Paya Lebar is developing into a business centre. The building is over 40 years old. If we do not go en bloc now, the cost of maintenance will be extremely high."

    Mr Chan, a businessman who owns six units at City Plaza totalling 5,400 sq ft, said most of his units were tenanted, but he did not think that the "trend of wholesale clothing is in our favour".

    "Retail sales are suffering, and wholesale retail is being taken over by (Chinese online site) Taobao. It is not economical to have a shop space and rental is very low."

    Mr Chan added that unit owners are eyeing a sale price of between $800 million and $1 billion. More than 100 people are expected at the meeting. He hopes a collective sales committee can then be formed.

    More than half of the unit owners he has spoken to have expressed interest in a collective sale, he said.

    One of them, Mr James Tan, said rentals have been falling. He bought his 20 sq m unit in the early 1990s and collected a monthly rental of about $1,200. At the peak, he was getting $1,800 but lately, tenants have been seeking rentals of $1,000 to $1,200.

    "Rental rates today are going back to those of the 1990s," he said, adding that even if he were to sell the unit, he did not know if the buyer could get a rental rate that would cover the instalment.

    Dr Lee Nai Jia, head of research at Edmund Tie and Company, said that interest in collective sales of residential properties has spilt into the commercial sector, citing the successful collective sale of Citimac. The freehold industrial complex near Tai Seng MRT station is reportedly being sold for $430.1 million.

    Dr Lee noted that Katong Shopping Centre also launched a collective sales bid earlier this year, but did not manage to meet its reserve price of $630 million.

    "The Paya Lebar area is likely to become a new growth cluster, with Paya Lebar Quarter catalysing the development of the area. Hence, there will be keen interest for City Plaza," he said.

    However, he noted that the asking price range of $800 million to $1 billion is "on the high side", as developers have other viable options.
    Any updates from the meeting?

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    I hear they are calling an EGM in 3 weeks or so to elect the Sales Committee. Apparently this AGM saw a record turnout and many of those who came are keen or at least interested to find out more, including those who own bigger share values. My friend who attended did say that there are some who want to wait for PL to be more developed before cashing out. I do wonder though if they can agree on the price and apportionment of the proceeds. The commercial units hold higher share values so likely they will get the lion's share. The residential units will want to be able to get comparable replacement units so the price has to commensurate.

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    Even for commercial units are of different market value as well. Those ground floor, definitely want a higher premium.

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    Anyone has any updates on this? The DC revision really pulled a brake on this?

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    Default EOGM

    Quote Originally Posted by PropVestor View Post
    Anyone has any updates on this? The DC revision really pulled a brake on this?
    There is some delay calling for the EOGM but I hear they are working on it and expect it to happen in next 2 months. It has nothing to do with DC but rather trying to organise a Collective Sales Committee. Meanwhile , I don't know if this is true but I hear Grandlink Square owners might also be looking into en bloc. Has anyone heard anything ?

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    Quote Originally Posted by Tulip09 View Post
    There is some delay calling for the EOGM but I hear they are working on it and expect it to happen in next 2 months. It has nothing to do with DC but rather trying to organise a Collective Sales Committee. Meanwhile , I don't know if this is true but I hear Grandlink Square owners might also be looking into en bloc. Has anyone heard anything ?
    Thanks for the update. For $1 billion, it is worth the wait.

    PropVestor

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    Quote Originally Posted by PropVestor View Post
    Thanks for the update. For $1 billion, it is worth the wait.

    PropVestor
    You are very welcome.

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    I would like to see how they tackle the apportionment methods:

    1) On the residential side, sizes are 85sqm and 150sqm units (big units are almost twice as big) and if I guess correctly, the share values should be 3 and 4. Striking a balance among the residential owners are already quite difficult.
    2) On the commercial side, I believe valuation methods need to be used. Find a few valuers and take the average?
    3) Then the biggest challenge would be to apportion between the residential and commercial owners.

    I really would love to see a successful en bloc for City Plaza. I have been through one en bloc as a SC, and it really brings the worst out of some people and makes things really hard. "It" means GREED.

    Thanks Tulip09 for updating and please continue to do so if it is convenient. I heard that CDL still owns quite a few shops (could be the best main road facing ones?). Any idea if that is true? Cheers!

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    Default City Plaza stakeholders

    Quote Originally Posted by bestguitarist View Post
    I would like to see how they tackle the apportionment methods:

    1) On the residential side, sizes are 85sqm and 150sqm units (big units are almost twice as big) and if I guess correctly, the share values should be 3 and 4. Striking a balance among the residential owners are already quite difficult.
    2) On the commercial side, I believe valuation methods need to be used. Find a few valuers and take the average?
    3) Then the biggest challenge would be to apportion between the residential and commercial owners

    Thanks Tulip09 for updating and please continue to do so if it is convenient. I heard that CDL still owns quite a few shops (could be the best main road facing ones?). Any idea if that is true? Cheers!
    Yes you are right. There are 3 big stakeholders in CP of which CDL is one ( Guan Realty). Second Chance is the second one and the third is an individual whose name I will not mention. But even together the 3 do not have enough share value to get the deal done. The overwhelming majority would be the individual unit owners. But they would need at least 2 if not 3 of the big guns to support the enbloc.
    I understand the commercial units have much higher share value than the residential both in terms of total percentage as well as individual units. So I wonder too how it will play out. The big stakeholders own commercial units. It is true that Guan Realty & second Chance are holding prime units. Good frontage on ground floor and near escalator on second floor. So for them I think price has to make sense. These prime units are doing quite well in terms of rental.

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