http://www.straitstimes.com/archive/...entre-20140829

Still no go for collective sale of Tanglin Shopping Centre

Second attempt fails to meet 80% mark in share value

Published on Aug 29, 2014 12:52 AM

By Chia Yan Min


AN AGEING Orchard Road landmark has failed in its second collective sale attempt, as not enough owners want the property to go on the market.

Owners of the strata-titled Tanglin Shopping Centre did not manage to garner the required consent of 80 per cent of owners before the collective sale agreement expired at midnight on Wednesday.

The owners who signed the collective sale agreement represented a 69.36 per cent stake in the property. The property has 173 owners in total.

For the building to be put on the market, owners of 80 per cent of the property - by both share value and strata area - must sign the agreement before it expires.

The sales committee garnered the 80 per cent level by strata area, but the percentage by share value fell short.

The 44-year-old building comprises a six-storey podium block of shops, eateries and medical suites, and a 12-storey tower block of offices.

The first attempt at a collective sale in 2011 fell through when the reserve price of $1.25 billion was not met.

This would have worked out to about $4,200 per sq ft (psf) of potential gross floor area, assuming the 68,512 sq ft freehold site had been redeveloped.

The reserve price for the second attempt was $1 billion, or about $3,200 psf per plot ratio.

The hotel arm of Singapore-listed property group City Developments, Millennium & Copthorne Hotels, holds the largest stake in the building at 34 per cent. It announced last November that it had signed the collective sale agreement.

Sales committee chairman Len Hoo, the managing director of family firm C.T. Hoo, which owns an office unit and a jewellery shop in the building, suggested that the Government look into bringing down the requisite collective sale consent level for older properties, to facilitate redevelopment.

Mr Hoo pointed to a number of other ageing strata-titled malls in the Orchard Road area, including Ming Arcade, Far East Shopping Centre and Orchard Towers, some of which have also tried and failed to launch collective sales.

It can be tough for owners to hit the 80 per cent consent level, especially as premiums on collective sale prices "are not as high as they used to be", he added.

An owner who did not sign the collective sale agreement - and who holds two office units in the property - said revisions in the reserve price had not been made in favour of office unit owners.

Speaking to The Straits Times on condition of anonymity, the owner said office unit owners were underrepresented in the sales committee, which mainly comprised owners of retail units.

For his part, Mr Hoo is considering joining the ranks of owners who have sold their units and cashed out.

"To stay here would cost a lot of money because of the rising building maintenance costs... Maybe I'll have to think about moving on," he said.

[email protected]