New Reporter
15-06-23, 14:46
People’s Park Centre eyes third collective sale bid; People’s Park Complex jumps on the bandwagon
Jun 14, 2023
TWO projects in Chinatown are looking to throw their hats into the en-bloc ring – the long-standing People’s Park Centre for the third time, and landmark development People’s Park Complex for the first.
This time, People’s Park Centre is looking at a reserve price of between S$1.5 billion and S$1.7 billion, chairman of the project’s collective sale committee Koh Yam Khoon told The Business Times.
The team is starting the process of collecting signatures from the requisite 80 per cent of unit owners soon, he said.
Separately – and just a stone’s throw away – the owners at the 31-storey People’s Park Complex are also gunning for a collective sale, with the process of obtaining consent from unit owners well underway.
Located at 101 Upper Cross Street, People’s Park Centre had attempted to sell at S$1.8 billion in 2022, but closed without any bids. This price tag worked out to a land rate of S$2,620 per square foot per plot ratio (psf ppr), and factored in the differential premium and the premium to top up the land tenure to a fresh 99-year lease.
“We have not been successful not because of our strategy, but because of the high reserve price,” said Koh.
He added that the tender for the mixed-use development had pulled in quite a bit of interest then, with a local developer making an offer below the initial asking price.
“We will use that as a benchmark, and if the sale committee is OK (with the reserve price), we will launch,” he said. “It’s about adjusting the price so that it’s beneficial for the owners and comfortable for buyers to come in.”
The 2022 attempt came three years after the maiden attempt, when the owners tried selling the 99-year leasehold building en bloc for S$1.35 billion. This was subsequently raised to S$1.5 billion, but the attempt failed because not enough owners consented to the move then.
Under the Urban Redevelopment Authority’s (URA) Master Plan 2019, People’s Park Centre spans 95,467 square feet (sq ft) with a gross plot ratio of 8.6. It houses 324 retail units, 256 office units, 120 residential units and a car park.
Some 300 metres away from the centre is People’s Park Complex, a strata-titled development comprising a six-storey podium of shops and offices as well as a 25-storey residential block housing 288 units.
Completed in 1971, the 99-year leasehold development has a site area of more than 114,000 sq ft, with a gross floor area of around 623,700 sq ft and gross plot ratio of 5.6.
In 2021, the building’s multi-storey car park was put up for public tender at a guide price of S$42 million. The site spanned 182,340 sq ft across multiple floors and comprised 648 car parking spaces, 56 motorcycle parking spaces and a restaurant unit on the top level of the car park.
It was reportedly sold to Lucky Pinnacle, an entity linked to Far East Organization, for S$39.33 million.
Challenges lie ahead
The two en bloc attempts come against a backdrop of a challenging collective sale environment.
In April, Knight Frank highlighted in an investment sales report that only a third of collective sales have succeeded in the current 2021/2023 sales cycle, down from the 63 per cent success rate in the 2017/2018 boom cycle.
Analysts attributed this to a mismatch of expectations in the market, with a price gap of up to 15 per cent between what developers are willing to pay and what owners are asking for.
Chia Siew Chuin, JLL head of residential research, research and consultancy, said that developers are also cautious amid rising costs owing to growing inflationary pressure, high interest rates and stamp duties.
“These factors cause further strain on developers’ profit margins, leading them to be more careful with their bids, exacerbating the gap in pricing expectations between developers and sellers,” she said.
https://www.businesstimes.com.sg/property/peoples-park-centre-eyes-third-collective-sale-bid-peoples-park-complex-jumps-bandwagon
Jun 14, 2023
TWO projects in Chinatown are looking to throw their hats into the en-bloc ring – the long-standing People’s Park Centre for the third time, and landmark development People’s Park Complex for the first.
This time, People’s Park Centre is looking at a reserve price of between S$1.5 billion and S$1.7 billion, chairman of the project’s collective sale committee Koh Yam Khoon told The Business Times.
The team is starting the process of collecting signatures from the requisite 80 per cent of unit owners soon, he said.
Separately – and just a stone’s throw away – the owners at the 31-storey People’s Park Complex are also gunning for a collective sale, with the process of obtaining consent from unit owners well underway.
Located at 101 Upper Cross Street, People’s Park Centre had attempted to sell at S$1.8 billion in 2022, but closed without any bids. This price tag worked out to a land rate of S$2,620 per square foot per plot ratio (psf ppr), and factored in the differential premium and the premium to top up the land tenure to a fresh 99-year lease.
“We have not been successful not because of our strategy, but because of the high reserve price,” said Koh.
He added that the tender for the mixed-use development had pulled in quite a bit of interest then, with a local developer making an offer below the initial asking price.
“We will use that as a benchmark, and if the sale committee is OK (with the reserve price), we will launch,” he said. “It’s about adjusting the price so that it’s beneficial for the owners and comfortable for buyers to come in.”
The 2022 attempt came three years after the maiden attempt, when the owners tried selling the 99-year leasehold building en bloc for S$1.35 billion. This was subsequently raised to S$1.5 billion, but the attempt failed because not enough owners consented to the move then.
Under the Urban Redevelopment Authority’s (URA) Master Plan 2019, People’s Park Centre spans 95,467 square feet (sq ft) with a gross plot ratio of 8.6. It houses 324 retail units, 256 office units, 120 residential units and a car park.
Some 300 metres away from the centre is People’s Park Complex, a strata-titled development comprising a six-storey podium of shops and offices as well as a 25-storey residential block housing 288 units.
Completed in 1971, the 99-year leasehold development has a site area of more than 114,000 sq ft, with a gross floor area of around 623,700 sq ft and gross plot ratio of 5.6.
In 2021, the building’s multi-storey car park was put up for public tender at a guide price of S$42 million. The site spanned 182,340 sq ft across multiple floors and comprised 648 car parking spaces, 56 motorcycle parking spaces and a restaurant unit on the top level of the car park.
It was reportedly sold to Lucky Pinnacle, an entity linked to Far East Organization, for S$39.33 million.
Challenges lie ahead
The two en bloc attempts come against a backdrop of a challenging collective sale environment.
In April, Knight Frank highlighted in an investment sales report that only a third of collective sales have succeeded in the current 2021/2023 sales cycle, down from the 63 per cent success rate in the 2017/2018 boom cycle.
Analysts attributed this to a mismatch of expectations in the market, with a price gap of up to 15 per cent between what developers are willing to pay and what owners are asking for.
Chia Siew Chuin, JLL head of residential research, research and consultancy, said that developers are also cautious amid rising costs owing to growing inflationary pressure, high interest rates and stamp duties.
“These factors cause further strain on developers’ profit margins, leading them to be more careful with their bids, exacerbating the gap in pricing expectations between developers and sellers,” she said.
https://www.businesstimes.com.sg/property/peoples-park-centre-eyes-third-collective-sale-bid-peoples-park-complex-jumps-bandwagon