New Reporter
26-05-23, 18:02
Singapore High Court grants sale order to Chuan Park’s S$890 million en bloc
May 26, 2023
https://i.imgur.com/tV73lfy.jpg
Chuan Park has been sold for S$890 million to entities related to developers Kingsford Group and MCC Singapore.
PHOTO: BT FILE
THE High Court granted a sale order to Chuan Park’s S$890 million collective sale on Friday (May 26), with the judge concluding that there is no evidence that the deal was not arrived at in good faith by its collective sales committee (CSC).
Justice Kwek Mean Luck said the six minority owners who had submitted grounds of objection before the High Court had also failed to show evidence for why Chuan Park’s gross floor area (GFA) should be higher than the plot ratio of 2.1.
Between August and September 2022, some Chuan Park owners had filed objections to the Strata Titles Board (STB), alleging that the condominium’s CSC and marketing agent ERA Realty failed to disclose material facts relating to a higher development baseline for the condominium.
The minority owners claimed this translated into a “deep discount” for the buyers, when the 99-year leasehold condo was sold via private treaty for S$890 million on Jul 5, 2022 to buyers related to developers Kingsford Group and MCC Singapore. The sales price was 5.1 per cent below the S$938 million reserve price.
Yet, they claim, this information was used when marketing the site to potential buyers, as the buyer had stated in its offer to purchase that the deal was subject to obtaining outline planning permission for developing the land “with a minimum floor area of 89,824 sq m for development baseline as reflected in the reply dated Aug 30, 2017, from the Urban Redevelopment Authority (URA)”.
Last December, STB issued a stop order for the collective sale of Chuan Park after three rounds of mediation among the various parties, The Business Times reported.
The sales price was arrived at based on a valuation report by GB Global’s Yick E-Ling, based on a GFA of 78,152.76 square metres (sq m) and plot ratio of 2.1. The dissenting owners, on their part, relied on valuer Stella Seow from OrangeTee.
The minority owners previously told The Business Times that a letter from URA in Aug 2017 showed that a development charge for the site would kick in for development above the maximum gross floor area of 89,824 sq m. This would assume a plot ratio of 2.4.
A higher baseline ratio – as opposed to Chuan Park’s gross plot ratio of 2.1, which was used in the valuation – would mean the buyer could build an additional 11,671 sq m of built-up area, the minority owners previously said. As a result, the property could have been sold for higher profits.
“This would have been material to the owners of Chuan Park, when they were considering whether to support the transaction at S$890 million,” they said.
In a written judgment on Friday, Justice Kwek said: “However, it is clear from the URA Letter 2017 and URA-ERA e-mails in 2021 that it was incorrect for Ms Seow to assume and apply a GFA of 89,824 sq m based on a 2.41 GPR to come to her valuation.”
The URA letter had indicated that the 89,824 sq m figure was for the purpose of computing a development charge and did not indicate the allowable development potential on the site.
The e-mail from URA to ERA had also clarified that the development baseline “had no bearing on the permissible development intensity”.
Hence, the valuation of the sales price should not be based on a “speculative” estimate of a property’s potential, Justice Kwek said.
The minority owners had also alleged that the S$890 million price was not arrived at in good faith, as the CSC did not verify the GFA of Chuan Park. They claimed that the committee had allowed ERA to exclude from its scope of services the verification of the GFA of the development and the development baseline.
Noting that ERA had done such checks, as proven by e-mail exchanges between the real estate agency and URA in 2021, Justice Kwek said he found “no merit” to the defendants’ submission that the committee was “not conscientious or prudent”.
Accordingly, the claimants, three authorised representatives of the committee, will be awarded the costs of the legal proceedings.
Owners of the 444 homes in Chuan Park stand to receive gross proceeds of about S$1.16 million for a 710 square foot (sq ft) unit, and up to S$2.53 million for a 2,045 sq ft unit. Of the two commercial units, the 474 sq ft one will receive S$1.09 million, and the 1,238 sq ft one, S$2 million.
Chuan Park is located near the Lorong Chuan MRT station. The 400,588.7 sq ft site can be redeveloped to a property with gross floor area of 841, 236.3 sq ft.
The collective sale tender for Chuan Park was launched on Mar 14, 2022, and closed on Apr 26, 2022 without bids. Before that, the condo had been put up for tender from Oct 5 to Nov 18, 2021, just before the government introduced fresh cooling measures in December.
Chuan Park had also taken a shot at a collective sale in 2018, with an asking price of S$900 million – revised upwards from an initial S$790 million – but did not secure the necessary 80 per cent consent from owners at the time.
https://www.businesstimes.com.sg/property/singapore-high-court-grants-sale-order-chuan-parks-s890-million-en-bloc
May 26, 2023
https://i.imgur.com/tV73lfy.jpg
Chuan Park has been sold for S$890 million to entities related to developers Kingsford Group and MCC Singapore.
PHOTO: BT FILE
THE High Court granted a sale order to Chuan Park’s S$890 million collective sale on Friday (May 26), with the judge concluding that there is no evidence that the deal was not arrived at in good faith by its collective sales committee (CSC).
Justice Kwek Mean Luck said the six minority owners who had submitted grounds of objection before the High Court had also failed to show evidence for why Chuan Park’s gross floor area (GFA) should be higher than the plot ratio of 2.1.
Between August and September 2022, some Chuan Park owners had filed objections to the Strata Titles Board (STB), alleging that the condominium’s CSC and marketing agent ERA Realty failed to disclose material facts relating to a higher development baseline for the condominium.
The minority owners claimed this translated into a “deep discount” for the buyers, when the 99-year leasehold condo was sold via private treaty for S$890 million on Jul 5, 2022 to buyers related to developers Kingsford Group and MCC Singapore. The sales price was 5.1 per cent below the S$938 million reserve price.
Yet, they claim, this information was used when marketing the site to potential buyers, as the buyer had stated in its offer to purchase that the deal was subject to obtaining outline planning permission for developing the land “with a minimum floor area of 89,824 sq m for development baseline as reflected in the reply dated Aug 30, 2017, from the Urban Redevelopment Authority (URA)”.
Last December, STB issued a stop order for the collective sale of Chuan Park after three rounds of mediation among the various parties, The Business Times reported.
The sales price was arrived at based on a valuation report by GB Global’s Yick E-Ling, based on a GFA of 78,152.76 square metres (sq m) and plot ratio of 2.1. The dissenting owners, on their part, relied on valuer Stella Seow from OrangeTee.
The minority owners previously told The Business Times that a letter from URA in Aug 2017 showed that a development charge for the site would kick in for development above the maximum gross floor area of 89,824 sq m. This would assume a plot ratio of 2.4.
A higher baseline ratio – as opposed to Chuan Park’s gross plot ratio of 2.1, which was used in the valuation – would mean the buyer could build an additional 11,671 sq m of built-up area, the minority owners previously said. As a result, the property could have been sold for higher profits.
“This would have been material to the owners of Chuan Park, when they were considering whether to support the transaction at S$890 million,” they said.
In a written judgment on Friday, Justice Kwek said: “However, it is clear from the URA Letter 2017 and URA-ERA e-mails in 2021 that it was incorrect for Ms Seow to assume and apply a GFA of 89,824 sq m based on a 2.41 GPR to come to her valuation.”
The URA letter had indicated that the 89,824 sq m figure was for the purpose of computing a development charge and did not indicate the allowable development potential on the site.
The e-mail from URA to ERA had also clarified that the development baseline “had no bearing on the permissible development intensity”.
Hence, the valuation of the sales price should not be based on a “speculative” estimate of a property’s potential, Justice Kwek said.
The minority owners had also alleged that the S$890 million price was not arrived at in good faith, as the CSC did not verify the GFA of Chuan Park. They claimed that the committee had allowed ERA to exclude from its scope of services the verification of the GFA of the development and the development baseline.
Noting that ERA had done such checks, as proven by e-mail exchanges between the real estate agency and URA in 2021, Justice Kwek said he found “no merit” to the defendants’ submission that the committee was “not conscientious or prudent”.
Accordingly, the claimants, three authorised representatives of the committee, will be awarded the costs of the legal proceedings.
Owners of the 444 homes in Chuan Park stand to receive gross proceeds of about S$1.16 million for a 710 square foot (sq ft) unit, and up to S$2.53 million for a 2,045 sq ft unit. Of the two commercial units, the 474 sq ft one will receive S$1.09 million, and the 1,238 sq ft one, S$2 million.
Chuan Park is located near the Lorong Chuan MRT station. The 400,588.7 sq ft site can be redeveloped to a property with gross floor area of 841, 236.3 sq ft.
The collective sale tender for Chuan Park was launched on Mar 14, 2022, and closed on Apr 26, 2022 without bids. Before that, the condo had been put up for tender from Oct 5 to Nov 18, 2021, just before the government introduced fresh cooling measures in December.
Chuan Park had also taken a shot at a collective sale in 2018, with an asking price of S$900 million – revised upwards from an initial S$790 million – but did not secure the necessary 80 per cent consent from owners at the time.
https://www.businesstimes.com.sg/property/singapore-high-court-grants-sale-order-chuan-parks-s890-million-en-bloc