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23-12-22, 10:07
People’s Park Centre, Loyang Valley en bloc tenders close without bids
Dec 22, 2022
https://i.imgur.com/VBTH22M.jpg
For People’s Park Centre, this is the 99-year leasehold mixed development’s second attempt at a collective sale.
PHOTO: BT FILE
THE collective sale tender for People’s Park Centre and Loyang Valley both recently closed without bids, making them the latest en bloc sites not to find buyers this year.
For People’s Park Centre, this is the 99-year leasehold mixed development’s second attempt at a collective sale. It was first put up for sale on Jul 6 at a reserve price of S$1.8 billion, which closed on Aug 18 with no bids. The tender was relaunched on Nov 8 at the same reserve price, which works out to a land rate of $2,620 per sq ft per plot ratio (psf ppr) including the differential premium and the premium to top up the land tenure to a fresh 99-year lease.
Industry observers have cited its large price tag exceeding S$1 billion as a stumbling block for developers, especially in view of rising construction costs.
Earlier attempts to sell the property for S$1.35 billion and S$1.5 billion in 2019 failed, as not enough owners gave their consent.
People’s Park Centre comprises a 13-storey block and a 30-storey block, with 324 shops, 256 offices, 120 apartments and a car park. Built in 1970, the development sits on a 95,467 square foot (sq ft) site, with a gross floor area of about 821,017 sq ft.
Meanwhile, Loyang Valley’s tender at a reserve price of S$980 million is its first stab at a collective sale since its previous attempt in 2018 – at a reserve price of S$750 million – failed to gain enough support.
“There are a few expressions of interest,” Terence Lian, head of investment sales for marketing agent Huttons Asia told The Business Times (BT). “We are following up with the interested developers and remain hopeful of a good outcome for Loyang Valley subsidiary proprietors.”
The 99-year leasehold site’s reserve price translates to a land rate of S$997 psf ppr, including an estimated land betterment charge of about S$174 million and a lease upgrading premium of S$187 million.
Lian said that the land rate could be lowered to $972 psf ppr, after factoring in a 7 per cent bonus balcony gross floor area and an additional land betterment charge of S$57 million.
Loyang Valley, which has 59 years left on its lease, sits on a 840,648 sq ft site zoned for residential use with a gross plot ratio of 1.6 under the 2019 Master Plan. It can yield approximately 1.35 million sq ft of gross floor area upon redevelopment.
Property consultants have told BT that many residential collective sale sites will likely remain unsold next year, as a mismatch in price expectations between buyers and sellers continues. The situation is exacerbated by factors such as high replacement cost for homeowners, uncertain macroeconomic conditions for developers as well as property cooling measures.
A general rise in property prices has led to owners hiking their asking prices for collective sales, so that they can afford a replacement property. But this has resulted in unrealistic reserve prices – the main reason why many en bloc projects failed to find buyers, said one consultant.
This year, 12 collective sale sites were sold, out of about 37 put on the market.
https://www.businesstimes.com.sg/property/peoples-park-centre-loyang-valley-en-bloc-tenders-close-without-bids
Dec 22, 2022
https://i.imgur.com/VBTH22M.jpg
For People’s Park Centre, this is the 99-year leasehold mixed development’s second attempt at a collective sale.
PHOTO: BT FILE
THE collective sale tender for People’s Park Centre and Loyang Valley both recently closed without bids, making them the latest en bloc sites not to find buyers this year.
For People’s Park Centre, this is the 99-year leasehold mixed development’s second attempt at a collective sale. It was first put up for sale on Jul 6 at a reserve price of S$1.8 billion, which closed on Aug 18 with no bids. The tender was relaunched on Nov 8 at the same reserve price, which works out to a land rate of $2,620 per sq ft per plot ratio (psf ppr) including the differential premium and the premium to top up the land tenure to a fresh 99-year lease.
Industry observers have cited its large price tag exceeding S$1 billion as a stumbling block for developers, especially in view of rising construction costs.
Earlier attempts to sell the property for S$1.35 billion and S$1.5 billion in 2019 failed, as not enough owners gave their consent.
People’s Park Centre comprises a 13-storey block and a 30-storey block, with 324 shops, 256 offices, 120 apartments and a car park. Built in 1970, the development sits on a 95,467 square foot (sq ft) site, with a gross floor area of about 821,017 sq ft.
Meanwhile, Loyang Valley’s tender at a reserve price of S$980 million is its first stab at a collective sale since its previous attempt in 2018 – at a reserve price of S$750 million – failed to gain enough support.
“There are a few expressions of interest,” Terence Lian, head of investment sales for marketing agent Huttons Asia told The Business Times (BT). “We are following up with the interested developers and remain hopeful of a good outcome for Loyang Valley subsidiary proprietors.”
The 99-year leasehold site’s reserve price translates to a land rate of S$997 psf ppr, including an estimated land betterment charge of about S$174 million and a lease upgrading premium of S$187 million.
Lian said that the land rate could be lowered to $972 psf ppr, after factoring in a 7 per cent bonus balcony gross floor area and an additional land betterment charge of S$57 million.
Loyang Valley, which has 59 years left on its lease, sits on a 840,648 sq ft site zoned for residential use with a gross plot ratio of 1.6 under the 2019 Master Plan. It can yield approximately 1.35 million sq ft of gross floor area upon redevelopment.
Property consultants have told BT that many residential collective sale sites will likely remain unsold next year, as a mismatch in price expectations between buyers and sellers continues. The situation is exacerbated by factors such as high replacement cost for homeowners, uncertain macroeconomic conditions for developers as well as property cooling measures.
A general rise in property prices has led to owners hiking their asking prices for collective sales, so that they can afford a replacement property. But this has resulted in unrealistic reserve prices – the main reason why many en bloc projects failed to find buyers, said one consultant.
This year, 12 collective sale sites were sold, out of about 37 put on the market.
https://www.businesstimes.com.sg/property/peoples-park-centre-loyang-valley-en-bloc-tenders-close-without-bids