Wing Tai calls off S$76.3 million Holland Tower en bloc purchase

[New Reporter]

Wing Tai calls off S$76.3 million Holland Tower en bloc purchase

Jul 28, 2023

WING Tai Holdings : W05 0%’ wholly-owned subsidiary has rescinded the contract for the acquisition of residential property Holland Tower for S$76.3 million.

Wing Tai, in a bourse filing on Friday (Jul 28), said the contract was rescinded as certain conditions were not fulfilled. It added that the calling off of the purchase has no material impact on the group’s net asset value.

The group’s subsidiary, Wincove Investment, entered into the contract for the freehold site in March.

Holland Tower was put up for collective sale in February. The 14-storey property located at 10 Holland Heights was completed in 1976, and comprises 19 residential units, each spanning 1,862 square feet (sq ft) to 2,949 sq ft.

It has a site area of 2,033 square metres (sq m) with a gross floor area of 4,059 sq m.

Wing Tai had planned to redevelop the property into a residential development for sale.

The counter closed at S$1.43 on Friday, down S$0.01 or 0.7 per cent.

https://www.businesstimes.com.sg/com...-bloc-purchase

[New Reporter]

Wing Tai’s Holland Tower en bloc buy falls through on planning permission hiccup

Jul 31, 2023

PROPERTY group Wing Tai Holdings is said to have called off its collective sale deal for Holland Tower, as planning conditions required by the developer to rebuild the site were not met.

Wing Tai is understood to have paid 5 per cent of the purchase price – around S$3.82 million – as a deposit thus far. The developer and SRI Capital Market, the marketing agent for Holland Tower, declined to comment when contacted on Monday (Jul 31).

On Friday, Wing Tai said that the contract for acquisition of the 14-storey apartment building at 10 Holland Heights was rescinded as certain conditions were not fulfilled. It added that the calling off of the purchase has no material impact on the group’s net asset value.

Facing challenges

This happened just four months after the developer announced in March that it would acquire Holland Tower for S$76.3 million. The price worked out to a land rate of S$1,746 square foot per plot ratio.

SRI had said at the time that developers may redevelop the site, which falls within District 10’s Good Class Bungalow (GCB) Area in Holland Park, to its current built-up area, subject to government approval.

Market watchers told The Business Times (BT) that there are certain challenges when it comes to redeveloping land within a designated GCB Area.

For instance, when an existing building within a GCB Area is torn down, developers are generally only allowed to build GCBs on the land, unless approvals are given by relevant authorities, said Galven Tan, deputy managing director of investment sales and capital markets at Savills Singapore.

Once approved, they can redevelop the site to its previous gross floor area with the same building height control. For Holland Tower, its site spans 2,033 square metres (sq m) with a GFA of 4,059 sq m and gross plot ratio of around two. The building houses 19 large apartments ranging from 1,862 square feet (sq ft) to 2,949 sq ft each.

Still, the usual setback requirement in a GCB Area will apply, such as only being allowed to build up to two storeys if the new building is within a setback zone of 25 metres from the adjoining GCB, Tan noted.

These restrictions are “not very ideal” for developers, so it is possible that Wing Tai asked for further waivers and stipulated these as a condition precedent – that is, a condition that must be fulfilled for the contract to be effective – in the Holland Tower deal, said Tan Hong Boon, JLL’s executive director of capital markets.

Since the condition precedent was not met, Wing Tai would be able to rescind the agreement and obtain a full refund of the deposit, he said. Both parties will not be allowed to make claims against the other.

BT understands that homeowners might have difficulty suing the developer for walking out on an en bloc deal since most form “two-dollar companies” or special purpose vehicles (SPV), which are wholly-owned subsidiaries, to bid for a site.

Owners are then only allowed to sue the SPV, which may not hold a lot of capital.

In 2018, Oxley Holdings had similarly called off an en bloc sale for freehold residential development Ampas Apartment. It had paid an initial deposit of S$4.75 million – 5 per cent of the S$95 million purchase price – but later rescinded the contract since a condition precedent could not be met.

The deal, as stipulated in its sale and purchase agreement, was subject to being granted outline planning permission for a new development of at least 120 units. But the government permitted only 112 units, which was the maximum allowable number for the site under its 2012 guidelines.

Owners at Ampas contended that they were entitled to keep the S$4.75 million deposit, but the suit was dismissed by the High Court.

In December 2021, another en bloc deal, for High Point condominium, fell through just as the government rolled out fresh cooling measures to prevent the property market from overheating. BT understands that Hong Kong-listed Shun Tak Holdings forfeited its S$1 million tender deposit then for the S$556.7 million sale, since the deal was unilaterally called off.

https://www.businesstimes.com.sg/pro...mission-hiccup