Landmark Tower sale completion facing delays

In-principle nod for lease top-up still pending over purchase of adjacent land


Fri, May 03, 2019


OWNERS of Landmark Tower are getting increasingly anxious after several delays to the completion of the S$286 million collective sale of the Chin Swee Road project.

The sale was first announced in May 2018, but the consortium of buyers - comprising ZACD Group, Sin Soon Lee Realty and MCC Land - is hoping for this to be completed by August this year. Nearby are two other en bloc projects: Sustained Land's Asia Gardens, bought in April 2018, and CapitaLand's Pearl Bank Apartments, bought in February the same year by private treaty. Their collective sales were completed last December and November respectively.

As it stands, Landmark's buyers have applied but yet to receive an in-principle lease top-up approval from the authorities.

The hold-up over the past few months seems to at least be caused in part by "new technical requirements set out by the relevant authorities", according to a letter sent to residents in February.

The letter said they now hope to get the approval by end-May.

ZACD Group told The Business Times that its provisional permission from authorities came with the conditions that the buyers purchase some state land surrounding Landmark Tower.BT understands that getting the in-principle approval comes after they complete the purchase of the land.

The group added: "Completion of the sale is subject to, amongst other things, the satisfaction of conditions precedent agreed between the Consortium and the CSC of Landmark Tower, including lease top-up approval. We have been following up closely with the authorities."

An SLA spokesperson told BT that agencies have met the developer to explain the requirements for the redevelopment of Landmark Tower.

The spokesperson added: "The developer has requested for an in-principle approval for the lease renewal and enquired on the terms of purchase of the two adjoining state land parcels. The agencies are working closely with the developer on their requests."

The letter from the collective sale committee and property consultants also told residents that the purchasers are "not wilfully delaying or attempting to renege on the contract."

The consortium is fully funded for this project, ZACD Group told BT. ZACD Group, which calls itself an integrated asset and wealth manager, said in May 2018 that it would create a private equity fund and raise up to S$70 million over the next three to five months from investors to fund their stake in the project. This was adjusted later to S$55 million, and to be achieved by the first quarter of 2019.

The consortium had purchased the Chin Swee Road project for some S$286 million or S$1,406 per square foot per plot ratio (psf ppr) last May, including a lease upgrading premium of S$57 million.

Landmark Tower was completed in 1985.

Lee Liat Yeang, senior partner of Dentons Rodyk & Davidson's corporate real estate practice, said that generally, with a proper application including an outline planning permission in hand, his experience is that in-principle approval for lease top-ups usually take six to eight weeks.

He said: "In a redevelopment situation in en blocs, there are always considerations beyond the site including the adjoining site configuration... which are all factors that affect the planning approval and timing. En bloc sites are always complicated because the Urban Redevelopment Authority (URA) will not have the opportunity to do a comprehensive study of the site until the application for Outline Planning Permission (OPP) comes in."

In a recent known case, Peace Centre and Peace Mansion's owners applied to SLA around mid-January 2019 to seek in-principle approval (IPA) for lease renewal to a fresh 99 years, with the OPP in place. This was granted at the end of March.

Separately, Pacific Mansion, the S$980 million mega collective sale deal sold in March last year, completed its sale in April this year.