April 18, 2007

Pine Grove owners reject big en bloc offer

Many fear they will have to downgrade to smaller flats despite $1.2m payout

By Joyce Teo, Property Correspondent

OWNERS at Pine Grove estate have turned their backs on a big payout by rejecting a collective sale that could have given each of them up to $1.2 million.

Despite prospects of making a large profit, many owners feared the hot property market would force them to downgrade from spacious flats to over-priced shoeboxes.

This sentiment is increasingly shared by owners of other estates considering en-bloc sales. And this has apparently slowed the process at Farrer Court and led to the upward revision of its reserve price.

At Pine Grove, only about 50 per cent of 660 owners in the sprawling ex-HUDC estate in Ulu Pandan voted for the sale in February - well short of the 80 per cent requirement.

The sales committee gave up on an option to extend the acceptance deadline by another month, effectively ending the process for now.

Retired university lecturer B.T. Liaw, who bought his 1,750 sq ft three-bedroom unit about 22 years ago for less than $300,000, would have pocketed a handsome profit.

But he told The Straits Times: 'I don't want to sell now. If you sell, you have to downgrade. Otherwise, you can't get the same space in this area.'

Another owner, Ms Chan Chiu Ngor, agreed: 'The risk is just too high.'

Most units at the 99-year leasehold Pine Grove are big by modern standards - 1,750 sq ft.

'Very often, owners will compare their old units with new ones and then find that they cannot replace their units,' said Ms Tang Wei Leng, the director for investment advisory services at DTZ Debenham Tie Leung, the firm engaged to handle the en-bloc sale.

The sale process sparked a lively and colourful inter-estate campaign.

An action group of about 10 owners led a campaign to defeat the proposal and sent several letters to owners on yellow paper outlining their objections.

For its part, the sales committee sent out almost two dozen letters - on green paper.

'At one point, we received letters from different parties almost every day,' said one owner who declined to be named.

If the Pine Grove sale had gone ahead, it would have been among the largest residential collective sales here.

The reserve price was revised twice, from $600 million to $650 million early this year. At $650 million, the owners would have reaped between $811,000 and $1.06 million each, depending on the size of their units.

But there were not enough takers at that price, and some owners upped the ante by demanding $1.2 million.

Units were selling for about $700,000 a year ago.

With the Feb 18 signing deadline looming, the sales committee decided to test the response based on the $1.2 million price level.

Ms Tang said her firm was prepared to market the estate at a higher price if it got the 80 per cent acceptance.

'We thought the magic number was $1 million,' said an owner keen to sell.

'But when we asked if people would agree to sell if they got $1.2 million, the response was pathetic...There were less than 10 replies.'

Residents like the spacious estate for its convenient location near an MRT station, shops, churches and schools.

'It's not just a flat, it's a home. It holds a lot of memories,' said owner Tong Yoke Tho, a public relations consultant.

Ms Tang said: 'The owners are not ready. Many of them are sitting on the fence.

'It's a timing issue. The market is moving so fast that units in their area have risen a lot.'

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'I don't want to sell now. If you sell, you have to downgrade. Otherwise, you can't get the same space in this area.'
RETIRED UNIVERSITY LECTURER B.T. LIAW, who would have made a handsome profit if he had accepted the offer, on why he refused to sell his 1,750 sq ft unit


'The risk is just too high.'
MS CHAN CHIU NGOR, another home owner who refused the offer