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Thread: Pine Grove residents plan $1.65b collective sale

  1. #1
    Join Date
    Oct 2011

    Default Pine Grove residents plan $1.65b collective sale

    Pine Grove residents plan $1.65b collective sale

    SEP 15, 2017

    If they succeed, it will be S'pore's largest such sale in dollar terms

    Grace Leong

    Owners at the sprawling 660-unit Pine Grove near Ulu Pandan Road are hoping to pull off Singapore's largest sale en bloc in dollar terms.

    They aim to launch a collective sale with an asking price of at least $1.65 billion - a price tag that would easily eclipse the record holder, the 618-unit Farrer Court's $1.34 billion collective sale back in 2007.

    If they achieve the collective sale, it would be third-time lucky for the Pine Grove owners who tried and failed in 2011 and 2008.

    Based on the asking price, each owner is looking to receive $2.08 million to $2.64 million per unit.

    On Tuesday, the sales committee, which was formed in July, appointed Huttons Real Estate Group as its marketing agent and is now hiring lawyers to work on the collective sales agreement.

    The next step is to determine the method of apportionment and get the requisite level of at least 80 per cent of owners to back the collective sale at an extraordinary general meeting on Oct 29, so that the tender process for the site can start.

    "Pine Grove residents feel the time is right to embark on a collective sale, while the property market is on its way up," Mrs Kogi Murthi, chairman of the Pine Grove collective sale committee, told The Straits Times yesterday.

    "We can expect good response from developers because of our prime location. It is among the few plots left available for residential development in the choice Holland Road district," she added.

    When the owners of the former Housing and Urban Development Company (HUDC) estate last tried a collective sale in 2011, they did not attract any bids after raising the reserve price to $1.7 billion from $1.33 billion to get the 80 per cent buy-in.

    Pine Grove, a 99-year leasehold project in the prime Holland Road belt, has 66 years left on its tenure.

    Under the Urban Redevelopment Authority's Master Plan 2014, the 893,227 sq ft site is zoned for residential use with a 2.1 plot ratio. Its existing plot ratio is 1.56. This means a project of up to 2,000 units could be built there, analysts say.

    Mr Nicholas Mak, the executive director of ZACD Group, questioned whether the latest hike in development charges, which took effect on Sept 1, will make it more challenging to sell large sites at a price that is attractive to sellers.

    Industry observers believe the market will get a big boost if this sale goes through, as it would show developers may be willing to pay more for Government Land Sales (GLS) sites and other collective sale sites.

    "While the reserve price is high, developers may look at this site in a different light," Dr Lee Nai Jia, head of research at Edmund Tie and Company, said. "In 2011, it didn't make much sense, but now the context has changed. The market is improving, credit is still available, and developers are hungry for land. So we may see a consortium of developers and private funds getting together to bid," he added.

    So far this year, eight collective sale deals worth $3.5 billion have been awarded, and another seven have been launched.

    There are now more options for developers, such as GLS sites, office buildings and nearby Normanton Park, which just launched its second collective sale bid. "But Pine Grove has a strong rental catchment due to its proximity to the National University of Singapore, and Jurong East... the upcoming second CBD gateway," Dr Lee added.

    When asked how it sees the site's potential, a CapitaLand spokesman said the developer "will continue to evaluate all well-located sites through GLS and private en bloc sales. We will also assess market conditions and tailor our strategies accordingly".

  2. #2
    Join Date
    Oct 2011


    Pine Grove owners expect at least S$1.65b in 3rd en bloc sale bid

    SEP 15, 2017


    PINE Grove could well emerge as Singapore's largest en bloc deal, going by its indicative reserve price of S$1.65 billion - a level that would trump the record of S$1.34 billion set in 2007 by Farrer Court, another former HUDC estate.

    The owners of Pine Grove, a 660-unit estate off Ulu Pandan Road, have appointed Huttons Asia as their marketing agent, and are now hiring lawyers to work on the collective-sale agreement.

    An extraordinary general meeting is to take place on Oct 29 to approve the agreement, which will require the consent of at least 80 per cent of the owners for a go-ahead to launch a public tender.

    With 66 years left on its lease, Pine Grove is making a third attempt at an en bloc sale, after unsuccessful attempts in 2007 and 2011. Its reserve price in 2011, S$1.7 billion, did not receive bids from developers.

    The current minimum reserve price translates to an estimated land rate of S$1,137 per square foot per plot ratio (psf ppr). This includes differential premiums for intensifying land use to its designated plot ratio of 2.1 and for a lease top-up to a fresh 99-year lease.

    Each owner is looking at receiving between S$2.08 million and S$2.64 million; units in the project range from 108 sq m to 180 sq m.

    In the year to date, seven collective sales with a residential component worth more than S$3 billion have been sealed. Another seven sites have been launched for tender with an aggregate asking price of S$2.61 billion; another 50 to 60 sites are said to be in various stages of the en bloc process.

    Market watchers say the huge size of the Pine Grove estate, spanning more than 893,000 sq ft, may attract a consortium of developers to bid jointly for the site in order to spread their risks.

    Including differential premiums for the development, the overall land cost would work out to over S$2 billion - a quantum that not many developers can stomach, said a veteran consultant.

    JLL regional director of capital markets Tan Hong Boon estimates that the site could yield more than 2,400 new homes. "Anyone looking at such site will likely be a big developer or a consortium," he said.

    Kogi Murthi, who chairs the Pine Grove's collective-sale committee, said Pine Grove residents feel "the time is right to embark on a collective sale, while the property market is on its way up".

    "We can expect a good response from developers because of our prime location," she added. "This is among the few plots left available for residential development in the choice Holland Road district."

    Given Singapore's qualifying certificate (QC) rules that deter hoarding of land by foreign developers - defined as developers with at least one foreign shareholder and/or director - such developers have to complete the project within five years and dispose of the completed units within two years, or incur extension charges on a pro-rated basis.

    Even more punitive is another rule for developers who buy land for residential development - they have to complete building and selling all units in a project within five years to qualify for ABSD (additional buyer's stamp duty) remission on land cost.

    Projects such as The Interlace in Depot Road and d'Leedon off Farrer Road, which were built on large sites sold during the 2007 en bloc boom, still have unsold units. (The Interlace sits on the former Gillman Heights site, and d'Leedon, on the former Farrer Court site.)

    Market watchers have told The Business Times lately that the current momentum in en bloc sale transactions has legs.

    About 12,000 new private homes could potentially be generated from the 10 residential collective sales that have been transacted since last year and from another seven sites which have been launched, but the tenders for which have yet to close or be awarded, JLL estimated.

  3. #3
    Join Date
    Jan 2009


    Now that Normanton is down....looking forward to this next potential enbloc. This project still have a few more hurdles to clear but what is interesting is the option to intensify the land use. I’m vested in this area in nearby projects so really hope this goes through.

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