En bloc candidate Chuan Park receives EOI of S$860m, lower than reserve price

Jun 20, 2022

EN BLOC hopeful Chuan Park, which is currently in a private treaty period, has received an expression of interest (EOI) from a developer for S$860 million, below its reserve price of S$938 million.

According to a circular issued to owners by marketing agent ERA Realty, which was seen by The Business Times (BT), the Collective Sale Committee (CSC) now requires an 80 per cent mandate from owners of the 99-year-leasehold condominium by Jun 26 so as to enter into negotiations with the developer and hammer out the terms of the sale and purchase (S&P) agreement. The deadline for the CSC to sign a S&P is Jul 5.

When contacted by BT, ERA declined to comment how many owners have signed the supplemental joint agreement so far.

Based on the EOI offer price of S$860 million, owners of residential units could stand to receive sales proceeds ranging from S$1.11 million to about S$2.45 million. Owners of a 474 square foot (sq ft) commercial unit and a 1,238 sq ft commercial unit could receive about S$1.05 million and S$1.94 million respectively.

The collective sale tender was launched on Mar 14 and closed on Apr 26. Prior to that, it was last put up for tender from Oct 5 to Nov 18, 2021, just before the government introduced fresh cooling measures in December. Chuan Park also took a shot at a collective sale in 2018 with an asking price of S$900 million - revised upwards from an initial S$790 million - but did not secure the necessary 80 per cent consent from owners at the time.

At S$938 million, the land rate, which includes an upgrading premium of S$192.62 million, works out to S$1,256 per sq ft per plot ratio (psf ppr), ERA had said previously. The development change is not payable due to the existing high baseline. The 400,588.72 sq ft site has a gross plot ratio of 2:1 under the Urban Redevelopment Authority’s Master Plan 2019 and an achievable proposed gross floor area of 841,236.3 sq ft. Subject to the necessary approvals, ERA estimates that it can be redeveloped into 900 units. It currently comprises 444 residential units and 2 commercial units.

Deal momentum has slowed in the collective sale market since December’s cooling measures as developers take a more cautious stance, although attractive sites with palatable prices continue to pique developers’ interest amid dwindling unsold stock. Wing Tai Holdings last month bagged Lakeside Apartments at some S$273.9 million via collective sale, topping the S$240 million reserve price.

Under the latest property curbs, housing developers are now subject to a higher additional buyer’s stamp duty (ABSD) of 35 per cent, up from 25 per cent previously. This heightens development risks, especially when it comes to large sites.

https://www.businesstimes.com.sg/rea...-reserve-price