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reporter2
03-06-17, 00:06
Collective sale market heats up with Rio Casa, Goh & Goh Building deals

MAY 26, 2017

Ex-HUDC estate Rio Casa and Goh & Goh Building near Beauty World MRT sold en bloc

Wong Siew Ying


Two deals with a combined value of $676.5 million were announced yesterday in yet another sign of the continued resurgence in the collective sale market.

One involved the sale of Rio Casa, a privatised HUDC estate in Hougang, while mixed-use development Goh & Goh Building, near Beauty World MRT station, was also snapped up. These follow the sale of One Tree Hill Gardens for $65 million to Lum Chang Group this month. The number of deals has now matched the three done in all of last year: Shunfu Ville, Raintree Gardens and Harbour View Gardens.

Brisk new-home sales and the recovering sentiment in the residential property market have fuelled demand for sites among developers.

Rio Casa in Hougang Avenue 7 was sold for $575 million to the joint venture firm Oxley-Lian Beng Venture comprising KSH Development, Oxley Holdings, Lian Beng Group and Apricot Capital.

"We received a handful of submissions for Rio Casa; it was hotly contested," said Mr Ian Loh, head of investment and capital markets at Knight Frank, the project's marketing agent. The intention is to apply for the grant of a fresh 99-year lease for the property and to redevelop it, the consortium said in a separate stock exchange filing yesterday.

It would have to fork out a further $208 million in estimated differential premiums for topping up the lease and to develop the site to a gross plot ratio of 2.8. Knight Frank noted that the combined sale price and differential payment translates to a land price of about $706 per sq ft per plot ratio based on the maximum permissible gross floor area of about 1.1 million sq ft.

Rio Casa comprises seven blocks of 286 apartment and maisonette units. Each owner stands to pocket about $2 million from the deal.

"The gross development value for this project is estimated at $1.4 billion and can potentially be redeveloped to build about 1,400 residential units, assuming an average size of 70 sq m per unit," Mr Loh added.

Separately, Alika Properties - a unit of BBR Holdings - exercised a call option yesterday to buy the Goh & Goh Building for $101.5 million. Built in the late 1980s, the freehold property at 110 to 122 Upper Bukit Timah Road comprises seven apartments and seven shops. Marketing agent JLL said that each shop owner will reap about $9 million while apartment owners will get $5.4 million each. "Subject to Alika's payment of a development charge, the site can potentially yield about 100 residential units and a level of retail shops on the ground floor," said BBR Holdings.

Activity in the collective sale market is expected to gather pace.

"There are about 25 to 30 projects in the market right now that have elected sales committees and are looking at collective sales," noted Mr Tan Hong Boon, JLL's regional director for capital markets here.

JLL is marketing five collective sale projects: Amber Park, Florence Regency, Brookvale Park Condominium, Boon Teck Tower and Cavenagh Gardens.

Consultancy CBRE said the collective sale projects it is working on - Villa D'Este and Cairnhill Mansions - may be ready for sale in the third quarter.

reporter2
03-06-17, 00:38
Two more properties sold en bloc; deals total S$676.5m

Oxley-led consortium buying Rio Casa for S$575m; BBR unit acquiring Goh & Goh Building for S$101.5m

May 26, 2017

LYNETTE KHOO


ANOTHER two collective sales have taken place in quick succession within a month of the first sale this year, showing firmer signs of a pick- up in the en bloc market.

Rio Casa, a former HUDC estate in Hougang, has been sold for S$575 million by a consortium comprising Oxley Holdings, KSH Holdings, Lian Beng Group and the private investment firm of Super Group's Teo family.

Separately, a unit of BBR Holdings (S) is acquiring mixed-use development Goh & Goh Building for S$101.5 million.

These came on the heels of the first residential collective sale of One Tree Hill Gardens near Orchard Road to Lum Chang Holdings for S$65 million this month.

"These deals show that collective sales have picked up, but the background work started last year for those sites," said Knight Frank head of investment and capital markets Ian Loh.

More sites will be encouraged to try for en bloc sale, he added, but he felt that the sustainability of the recovery will ultimately depend on how reasonable the reserve price is.

At Rio Casa, which comprises seven residential blocks of 286 apartment and maisonette units, each owner stands to make a gross sale of about S$2 million, said Knight Frank which brokered the sale. Owners were earlier expecting more than S$450.8 million for the collective sale.

The owners accepted the offer on Wednesday, Oxley, KSH and Lian Beng said in their regulatory filings with the Singapore Exchange.

Oxley and KSH each have a 35 per cent stake in Oxley-Lian Beng Venture Pte Ltd, which submitted the tender for Rio Casa. Lian Beng has a 20 per cent stake in the consortium while the Teo family's Apricot Capital holds 10 per cent.

The gross development value for this project is estimated at S$1.4 billion and can potentially be redeveloped to build about 1,400 residential units, assuming an average size of 70 sq m per unit, Knight Frank said.

An estimated differential premium of S$208 million is payable to the state for the top-up of the lease to 99 years and for the development of the 36,811.1 sqm site to a gross plot ratio of 2.8.

This translates to a land price of about S$706 per square foot per plot ratio (psf ppr), based on the maximum gross floor area (GFA) of about 1.11 million sq ft. With the inclusion of a 10 per cent balcony bonus GFA, the land price works out to S$669 psf ppr, subject to the authorities' approval.

Mr Loh said the mandated 80 per cent consensus among owners at Rio Casa for the sale was reached in the shortest time he had seen for a project of this size - within three weeks of the first signature being obtained.

As for Goh & Goh Building, the option to purchase was exercised on Thursday by BBR's 62 per cent indirect subsidiary Alika Properties Pte Ltd.

JLL, which brokered the sale, said that each residential owner and each retail owner stand to pocket S$5.4 million and S$9 million respectively.

The four-storey freehold property, which sits on 2,868.3 square metres of land area in Upper Bukit Timah Road, is zoned residential with commercial on the first storey and has a plot ratio of 3.0.

Subject to Alika's payment of a development charge, the site can potentially yield about 100 residential units and a level of retail shops on the ground floor, taking into account the permissible gross floor area of 8,604.9 square metres.

These en bloc deals announced on Thursday are subject to, among other things, approval by the Strata Titles Board.

JLL regional director for capital markets Tan Hong Boon noted that the short supply of sites available in the government land sales vis-a-vis developers' appetite will continue to spur more collective sales.

The success of these recent deals will naturally lift owners' expectations and cause collective sale prices to rise further, "some to unrealistic levels", he added. "More collective sale sites will be accelerated to reach the market faster."

There are more projects that have joined the bandwagon of the collective sales process. Owners of Cavenagh Gardens condominium in District 9 and Brookvale Park near Clementi have set up their sales committees and appointed JLL as their marketing agent.

Owners of freehold condominium Kemaman Point in Balestier have appointed Knight Frank as their marketing agent.

At Pearl Bank Apartments in Outram, the owners are said to be short-listing marketing agents.