May 6, 2007

$2.3m in en bloc sale but some are not happy

Reason: Finding a comparable property to replace the one sold will now cost a whole lot more

By Melissa Sim

SCORING a collective sale is usually seen as the real estate equivalent of hitting the jackpot, but try telling that to Mr Sulistiowati Kusumo.

The businessman should be overjoyed - after all, he's going to pocket $2.3 million for his Horizon Towers flat - but he feels shortchanged.

The Leonie Hill condo was sold en bloc last year for $500 million but that now looks cheap as values since then have sky-rocketed.

But what really gets Mr Sulistiowati, 51, steamed is that he did not agree to the sale in the first place.

'I'm at the losing end and I did not want to sign from the beginning,' said Mr Sulistiowati, one of 34 minority owners of the 210-unit 99-year leasehold property.

And finding a flat comparable to his 2,400 sq ft one at Horizon Towers would now cost the earth.

There are many like Mr Sulistiowati, whose tales of woe are starting to drown out enthusiasm about collective sales.

Take Grangeford Apartments, near Horizon Towers. It is up for a collective sale, asking about $2,000 per sq ft (psf) - more than double the $850 psf achieved at Horizon Towers.

This has prompted some Horizon Towers owners to try to get their own deal scrapped.

'The agreement was signed last year so the price is capped. Now the price increases every month,' said Mr Sulistiowati.

Businessman Ajay Kumar Dhar, 40, backed the sale but admits to have lost out and has yet to find a new unit in the area.

'Naturally I regret it, but it's fate. I may have to go to other districts,' he said.

The 99-year leasehold Pine Grove has avoided the problem by recently rejecting an offer that would have paid each owner about $1.2 million.

Many owners refused to back the proposal, fearing they would not find replacement units as spacious as those at Pine Grove.

Gillman Heights owners signed its deal last year and finally sold in February for $548 million - about $890,000 for 1,700 sq ft units and $950,000 for 1,900 sq ft ones.

Retiree Cheng Wai Chuen, 68, who has a smaller flat, said he has been priced out of the market.

'I've looked around and I would have to pay about $1.2 million for a place that's about 1,200 sq ft,' he said.

Software businessman Mah Kah Hoe, 54, added: 'Even if I want another 99-year flat in the area, I have to top up another 30 to 40 per cent of what I'm getting.' He will also receive about $890,000.

Others like Mr Cheng have no spare cash to buy a new place until the sale goes through. 'I have no money, how do I buy?' he asked.

The sale paperwork can mean the cash is not paid out until nine months after a buyer has been found.

A Gillman Heights resident who wanted to be known only as Madam Ong, has already bought another flat but it was a forced purchase in view of the rising prices.

Her new Pasir Panjang unit is smaller, further from town, has worse facilities and she even had to fork out about $200,000 on top of the proceeds from the collective sale.

Said Madam Ong, a housewife in her 50s: 'We think it's queer that people are congratulating us about the en bloc because we never wanted to sell in the first place and now we have to bear the brunt of it.'

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