COLLECTIVE sale mania is scaling giddy new heights, with home owners at Farrer Court putting the estate up for sale at $1.5 billion - a figure that would smash current records.
Just three months ago, the former HUDC estate on Farrer Road was said to be considering a collective sale for a far lower $900 million.
But amid the collective sale frenzy, prices have kept soaring since then - prompting the far more ambitious asking price announced yesterday.
If Farrer Court is sold en bloc, it would be Singapore’s most expensive residential collective sale - a record that has already been broken three times this year.
Nearby Leedon Heights, sold last month for $835 million, is the current title-holder. It beat the $548 million paid for Gillman Heights off Alexandra Road in February, and the $500 million for Horizon Towers in Leonie Hill in January.
But Farrer Court is larger than these three sites. It sits on an 838,488 sq ft plot near the junction of Farrer Road and Holland Road, a stone’s throw from the upcoming Farrer MRT Station.
Its owners revised their asking price upwards recently ‘due to market changes’, said Mr Tan Hong Boon, executive director of Credo Real Estate, which is marketing the estate.
At $1.5 billion, each owner of the 618-unit condominium stands to reap an average of $2.4 million from the sale, he added. This is more than double the $900,000 fetched by one unit in March.
Any buyer of the site will also have to pay an additional $500 million or so, which includes the development charge and a premium to top up the site’s lease to 99 years from its current remaining lease of 69 years. This will take the estate’s total price up to $2 billion, or about $850 per sq ft per plot ratio.
According to market sources, the owners have agreed on a reserve price of about $1.2 billion, excluding the development charge and lease upgrading premium. But Mr Tan expects to receive offers ‘in the region of $1.5 billion’. Some major players have already expressed interest, he noted.
‘Several large developers have been following up closely with us on the progress of Farrer Court for a few months,’ he said, adding that after yesterday’s announcement, ‘we’ve already received calls from some people’.
Given the large size and price tag of the estate, he believes developers may team up with other firms, or with funds or major contractors, to bid for the site.
Farrer Court can be redeveloped into a 36-storey development with 1,800 units at 1,250 sq ft each, said Mr Tan.
This would make the new project Singapore’s largest condominium in terms of number of units, he added. A 36-storey project would be a unique feature in the area, where most surrounding developments go up to only 12 storeys.
Farrer Court’s bid to go for an offer with a higher asking price comes as rising property prices are thwarting other collective sale attempts.
Owners of Pine Grove, another former HUDC estate in Ulu Pandan, recently rejected a collective sale that would have given them $1.2 million each.
They said home prices were climbing so quickly that the payouts were not enough to buy a similar-sized replacement home in the vicinity.
Meanwhile, other former HUDC estates are said to be gearing up to go en bloc as well. Market watchers say the process has begun in estates such as Laguna Park, Neptune Court, Lakeview and Shunfu Ville, even though the last has yet to be privatised.
Source : Straits Times - 15 May 2007
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