Owners still pressing for en bloc despite cooling measures

Posted by edison_foo on September 11, 2018
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Despite tensions caused by the recent property cooling measures, some of the larger private residential projects in Singapore are still pressing on with hope for a collective sale.

One of them is Laguna Park – a 99-year leasehold condominium situated within the East Coast precinct, which is close to the latest new launch condo project, Seaside Residences by Frasers Property. It comprises a total of 516 private homes & 12 shops on a land area of 669,486 sq feet and will be launching for tender on 18 September 2018 with a reserve price of $1.48 billion.

On top of the reserve price, the developer who acquires Laguna Park will have to fork out an (estimated) additional $453.5 million as differential premium and another $416 million to refresh the land tenure to 99 years.

Thus, the breakeven price for the eventual buyer will work out to be approximately $1,800 to $1,900 psf and the site is able to yield around 1,700 private homes based on a gross floor area (GFA) of 1.87 million sq feet.

Homeowners at Laguna Park are expected to receive a gross sales proceed between $2.6 million to around $5 million each, while 12 shop owners will each receive around $2.53 million – $2.66 million.

The en bloc sale tender for Laguna Park will close on 01 November 2018.’

On the other hand, Pandan Valley will also be going for en bloc – in a bid to become the largest collective sale in Singapore’s history with a price tag of $2.6 billion. The current record holder is Farrer Court (today is known as D’Leedon condo), which was acquired by CapitaLand by in 2007 for $1.34 billion.

Pandan Valley En Bloc

Built during the late 1970s, the 623-unit Pandan Valley is a freehold development spanning across a huge plot with a total land area of 865,000 sq feet. It was noted that Pandan Valley last attempt at a collective sale was back in 2011, which did not succeed.

Several other developments on billion-dollar sites, such as Mandarin Gardens, Braddell View, The Dairy Farm, Pine Grove, and Ivory Heights are also in the midst of pushing for a collective sale.

Mandarin Gardens En Bloc

Analysts believe that such mega residential sites will face an uphill in their pursuit for an en bloc as property developers were being hit with a higher cost for land acquisitions after the latest property cooling measures and the recent surge in development charges (DC) – as a result increasing their risks of developing sites of larger scale.

The sentiment of land acquisitions has recently been felt as developers are taking a conservative approach to the recent government land sales (GLS)

It was also mentioned that such huge sites will be challenging in terms of the number of privates which these sites can yield and there will be an uncertainty of whether the property developer can finish selling all the units within the stipulated 5-year timeframe, in order the avoid penalty charges from the government.

Owners still pressing for en bloc despite cooling measures
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