Owners at the sprawling 660-unit Pine Grove near Ulu Pandan Road are hoping to pull off Singapore’s largest sale en bloc in dollar terms.
They aim to launch a collective sale with an asking price of at least $1.65 billion – a price tag that would easily eclipse the record holder, the 618-unit Farrer Court’s $1.34 billion collective sale back in 2007.
If they achieve the collective sale, it would be third-time lucky for the Pine Grove owners who tried and failed in 2011 and 2008.
Based on the asking price, each owner is looking to receive $2.08 million to $2.64 million per unit.
On Tuesday, the sales committee, which was formed in July, appointed Huttons Real Estate Group as its marketing agent and is now hiring lawyers to work on the collective sales agreement.
The next step is to determine the method of apportionment and get the requisite level of at least 80 per cent of owners to back the collective sale at an extraordinary general meeting on Oct 29, so that the tender process for the site can start.
“Pine Grove residents feel the time is right to embark on a collective sale, while the property market is on its way up,” Mrs Kogi Murthi, chairman of the Pine Grove collective sale committee, told The Straits Times yesterday.
TIMING IS RIGHT
In 2011, it didn’t make much sense, but now the context has changed. The market is improving, credit is still available, and developers are hungry for land.
DR LEE NAI JIA, head of research at Edmund Tie and Company, on making another bid for a collective sale.
“We can expect good response from developers because of our prime location. It is among the few plots left available for residential development in the choice Holland Road district,” she added.
When the owners of the former Housing and Urban Development Company (HUDC) estate last tried a collective sale in 2011, they did not attract any bids after raising the reserve price to $1.7 billion from $1.33 billion to get the 80 per cent buy-in.
Pine Grove, a 99-year leasehold project in the prime Holland Road belt, has 66 years left on its tenure.
Under the Urban Redevelopment Authority’s Master Plan 2014, the 893,227 sq ft site is zoned for residential use with a 2.1 plot ratio. Its existing plot ratio is 1.56. This means a project of up to 2,000 units could be built there, analysts say.
Mr Nicholas Mak, the executive director of ZACD Group, questioned whether the latest hike in development charges, which took effect on Sept 1, will make it more challenging to sell large sites at a price that is attractive to sellers.
Industry observers believe the market will get a big boost if this sale goes through, as it would show developers may be willing to pay more for Government Land Sales (GLS) sites and other collective sale sites.
“While the reserve price is high, developers may look at this site in a different light,” Dr Lee Nai Jia, head of research at Edmund Tie and Company, said. “In 2011, it didn’t make much sense, but now the context has changed. The market is improving, credit is still available, and developers are hungry for land. So we may see a consortium of developers and private funds getting together to bid,” he added.
So far this year, eight collective sale deals worth $3.5 billion have been awarded, and another seven have been launched.
There are now more options for developers, such as GLS sites, office buildings and nearby Normanton Park, which just launched its second collective sale bid. “But Pine Grove has a strong rental catchment due to its proximity to the National University of Singapore, and Jurong East… the upcoming second CBD gateway,” Dr Lee added.
When asked how it sees the site’s potential, a CapitaLand spokesman said the developer “will continue to evaluate all well-located sites through GLS and private en bloc sales. We will also assess market conditions and tailor our strategies accordingly”.
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