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Thread: Florence Regency sold to Chinese developer Logan Property at $629 mil

  1. #31

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    Florence Regency closes collective sale for $629m

    Oct 21, 2017

    Chinese developer agrees to match independent valuation for site

    Grace Leong

    Florence Regency has finally closed a collective sale under private treaty after Chinese developer Logan Property (Singapore) agreed to match the independent valuation of $629 million for the property in Hougang Avenue 2.

    Each owner will receive gross proceeds of between $1.84 million and $1.89 million.

    Owners of the 336-unit former HUDC estate had earlier received a bid from Chinese developer Kingsford that exceeded the reserve price of $600 million and two that did not, according to Mr Jagir Singh Touwana, chairman of the collective sale committee.

    But none of the offers had met the $629 million valuation by independent valuer Colliers International. The tender closed on Sept 27, with the three bidders refusing to match the valuation.

    The collective sale agreement required that the sale price be no lower than the valuation.

    This prompted sole marketing agent JLL to woo other developers, in an attempt to close the deal under private treaty within 10 weeks of the close of the tender.

    Had no buyer been found, the owners would have had to plan another public tender exercise in January.

    "We are relieved it is finally over. Given the circumstances and today's market, it is a good price and a fair amount. Everyone hopes for a lot of money, but we have to be realistic," said Mr Touwana, who is also a home owner there.

    The 389,236 sq ft site in Hougang is zoned residential with a gross plot ratio of 2.8, and could yield around 1,000 units.

    The land price works out to $842 per sq ft (psf) per plot ratio after factoring in the estimated differential premiums of $288.6 million to top up the lease to a fresh 99 years and to develop the site to the gross plot ratio of 2.8.

    It is the second site that has been snapped up by Hong Kong-listed Logan Property, which made history in May when, together with Chinese developer Nanshan Group, it put in the top bid of $1.003 billion for the 21,109 sq m site in Stirling Road. That was the first time that a purely residential site in the Government Land Sales programme had crossed the billion-dollar mark.

    "Florence Regency is one of the last few privatised HUDC (estates) in the north-east region. The future development will enjoy unblocked views, located next to landed housing estates and across the Hougang Stadium and the sports and swimming complex," said Mr Tan Hong Boon, JLL's regional director.

    ZACD Group executive director Nicholas Mak said that the land rate is fairly reasonable, noting: "It is a bit cheaper, compared with Serangoon Ville, which was sold at the land rate of $861 psf ppr, and the Government Land Sales site in Serangoon North Avenue 1 sold at $965 psf ppr in July."

    Dr Lee Nai Jia, head of research at Edmund Tie & Company, expects to see more interest in Serangoon, which is part of the upcoming Bidadari housing estate. That should create a lot of excitement in the area, he said.

    The site is located near Hougang and Kovan MRT stations along Upper Serangoon Road, the bus interchange and Hougang Mall.

    Florence Regency's sale brings the total number of former HUDC estates that have been sold en bloc since 2005 to 12, according to consultants. Ivory Heights is on the market, while Braddell View, Pine Grove, Laguna Park and Chancery Court have started the process.

  2. #32

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    Default China's Logan Property buys Florence Regency for S$629m

    China's Logan Property buys Florence Regency for S$629m

    Sat, Oct 21, 2017

    Lynette Khoo

    FLORENCE Regency, a privatised HUDC estate in Hougang, has finally found a buyer willing to match the independent valuation of S$629 million - Logan Property.

    Florence Regency's sole marketing agent JLL said the Singapore-incorporated subsidiary of the Hong Kong-listed Chinese developer picked up the 336-unit development in Hougang Avenue 2 for S$629 million through a collective sale.

    This marks the second land parcel in Singapore snapped up by Logan Property, which in May secured a site in Stirling Road with Nanshan Group under the government land sales (GLS) programme at a whopping S$1.003 billion or S$1,050.7 per square foot per plot ratio (psf ppr).

    The public tender for the collective sale of Florence Regency closed on Sept 27 with three bidders but none agreed to raise their bid prices to match the independent valuation of S$629 million. The collective sale agreement drafted by law firm Lee & Lee required that the sale price be no lower than the valuation.

    This prompted JLL to court other developers in the hope of closing a deal under private treaty within 10 weeks of the close of the public tender.

    JLL said this is the first collective sale attempt by the owners of the development with 80 per cent approval attained in under three weeks.

    Owners would expect to receive gross sale proceeds of S$1.84-$1.89 million per unit, said JLL regional director Tan Hong Boon.

    After factoring in the current estimated differential premiums of S$288.6 million payable to the state to top up the lease to a fresh 99 years, and to develop the 389,236 sq ft site to a gross plot ratio (GPR) of 2.8, the land price works out to about S$842 psf ppr.

    The site is near the Hougang MRT station, which will become an interchange station when the planned Cross Island Line is completed, and the bus interchange of Hougang Mall. It is also within walking distance to Kovan MRT Station in Upper Serangoon Road.

    The collective sale of Florence Regency follows that of two other former HUDC estates in the area - Rio Casa in Hougang Avenue 7 and Serangoon Ville in Serangoon North Avenue 1 to an Oxley Holdings-led consortium for S$706 psf ppr and about S$860 psf ppr respectively. The government had also sold a site in Serangoon North Avenue 1 in July to Keppel Land and Wing Tai for S$965 psf ppr.

    These three sites alone can generate more than 3,000 units. Logan Property expects to build some 1,400 units at the Florence Regency site, its investor relations director Derek Lee told The Business Times on Friday.

    Some analysts have cited potential competition in the Hougang/Sengkang region as a potential deterrence for other developers to raise their bids for Florence Regency. JLL's Mr Tan told BT that there were other developers looking at the site who decided not to submit firm proposals. But the valuation represents a fair price for the site, and its location is more favourable than the other three sites due to its greater proximity to an MRT station, he said.

    Logan Property's Mr Lee said the land price for Florence Regency is comparable to the average cost of nearby sites that were sold recently.

    "We also see that residential sales momentum is good even though there is quite a lot of supply in the area," he said. The decline in property prices over the past three to four years also provided "an uptrend opportunity for us to tap".

    Logan Property will continue to focus on residential sites in Singapore through both the GLS programme and the en bloc market, even as it remains focused on the Greater Bay area of Guangdong, Hong Kong and Macao, Mr Lee told BT.

    On Logan Property's latest acquisition, ZACD Group executive director Nicholas Mak said game theory was at play.

    "It is better for it to match the valuation and buy this site than to try in other en bloc sale or GLS tenders where it may not come close to winning the tender," he said. "Furthermore, the land price of S$842 psf ppr for this location is attractive in today's market."

    Other Chinese players that have scooped up sites through the collective sales market this year include Kingsford Huray Development and a joint venture between Singhaiyi and Huajiang International Corporation.

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