En bloc offers for Lakeside Towers fall short of S$350 million reserve price

Apr 14, 2023

OWNERS at Jurong condominium Lakeside Towers will move into private treaty negotiations with potential buyers, following the closing of the collective sale tender on Wednesday (Apr 12).

There were formal submissions and expressions of interest from local developers, but even the “best offer” fell short of the reserve price, sole marketing agent JLL told The Business Times.

Located a stone’s throw from Jurong Lake Gardens, near the upcoming Jurong Lake District (JLD), the 144-unit condominium was put up for sale at S$350 million on Feb 9. This is 14.8 per cent higher than its 2018 reserve price of S$305 million.

The current reserve price of S$350 million translates to a land rate of S$1,244 per square foot per plot ratio (psf ppr), after factoring in an estimated lease top-up premium with no land-betterment charge, said JLL.

Taking into consideration the 10 per cent bonus gross floor area (GFA), including a lease top-up premium and a land-betterment charge, this translates to S$1,196 psf ppr.

Completed in 1981, the 99-year leasehold Lakeside Towers comprises two 16-storey blocks with 144 units. The site has a land area of 14,236.1 square metres (sq m), with a gross plot ratio (GPR) of 2.1.

But the development’s current as-built GFA is equivalent to a GPR of 2.35953, JLL has said. Based on the minimum average size control of 85 sq m, the site may accommodate up to 395 new apartments.

The collective sale attempt by Lakeside Towers came on the back of CapitaLand Development’s announcement on Feb 7 to redevelop JCube mall into a 40-storey residential and commercial property, in line with the government’s plans to transform the JLD into Singapore’s second central business district.

A 6.8 h white – or mixed-use – site will also be on offer in Jurong under the Government Land Sales programme in the first half of this year. The site, expected to be tendered for sale in June, will yield around 600 private homes and 100,000 sq m of commercial space, with a GFA of 375,000 sq m.

Analysts noted that the residential en bloc market has been losing steam in recent months and might remain challenging.

As indicated by a Knight Frank report on investment sales in the first quarter of 2023, only a third of collective sales succeeded in the current 2021/2023 sales cycle, down from the 63 per cent success rate in the 2017/2018 boom cycle.

The last en bloc sale in the Jurong area was sealed in July 2022, when Park View Mansions, on the same stretch of Yuan Ching Road as Lakeside Towers, was sold to property groups Chip Eng Seng and KSH Holdings, with delisted SingHaiyi Group, for S$260 million. The deal price translated to a land rate of S$1,023 psf ppr.

And two months before that, neighbouring condo Lakeside Apartments was also sold to Wing Tai Holdings for S$273.9 million, a 14 per cent premium over its S$240 million reserve price. The original reserve price worked out to a land rate of S$1,077 psf ppr.

Meanwhile, the en bloc bid by Lakepoint Condominium closed without offers in June 2022. It had previously closed without a bid in December 2021. The collective sales agreement has since expired, said exclusive marketing agency PropNex Realty.

Three en bloc deals were sealed in Q1 2023, amounting to S$583.8 million in value.

Freehold sea-fronting Meyer Park was sold in February to a joint venture between UOL Group and Singapore Land Group for S$392.18 million, a notch higher than its guide price of S$390 million.

Including a land-betterment charge of around S$90.9 million, the land rate comes to about S$1,668 psf ppr, which factors in a 7 per cent bonus floor area.

In January, Bagnall Court, a freehold condo at Upper East Coast Road, sold for S$115.3 million or S$1,106 psf ppr; in March, Holland Tower went to Wing Tai Holdings for S$76.3 million or S$1,746 psf ppr.

https://www.businesstimes.com.sg/pro...-reserve-price