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Thread: General 'en-bloc' News; Bids & Tenders

  1. #1
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    May 2006

    Exclamation General 'en-bloc' News; Bids & Tenders

    Jan 31, 2006
    Collective home sales set for another bumper year

    Seven sites already launched, as market rides on positive economic outlook
    By Joyce Teo
    Property Correspondent

    IT IS no surprise that optimism is flowing in the property market: The year has barely begun, but already seven collective sale sites have been launched.

    And that is coming off a record year in 2005 when 37 collective sales of residential sites worth $2.09 billion were completed - more than double the deals and value achieved in 2004.

    Ms Soon Su Lin, executive director of property consultancy CB Richard Ellis, said such sales will continue at the same pace as last year thanks to a good economic outlook.

    Supply and demand tells the story: Sites sold en bloc last year generated a potential supply of 3,860 new homes, while overall, 8,955 new homes were sold last year.

    'So potential supply from the sites being sold en bloc is expected to meet good demand when they are ready for launch,' said Ms Soon.

    Home owners in collective sales typically get at least 30 to 50 per cent more than what they would have reaped from an individual sale. But the risk, said consultants, is that owners may have unrealistically high price expectations.

    Typically, potential collective sale developments are more than 10 years old with rising maintenance costs.

    Selling these sites require the consent of at least 80 per cent of the owners; those less than 10 years old need 90 per cent acceptance.

    Because people looking to rent tend to migrate to new projects, owners of older projects find it harder to find tenants. And with maintenance costs rising, they may be keener on a collective sale, said DTZ Debenham Tie Leung director Tang Wei Leng.

    But that does not mean everyone can cash in.

    Prime sites in districts 9, 10 and 11 clearly have the best chances. The Cairnhill area appears to have the most potential sites, though projects in posh Ardmore, Draycott, Nassim, Leonie Hill and St Thomas Walk are also very popular, said Credo Real Estate executive director Tan Hong Boon.

    'Sites in Cairnhill are very sought-after and the success rate will be good if they are not over-priced,' he said.

    In general, most owners ask for about $800-$850 per square foot per plot ratio, though some want as much as $1,000 psf ppr, he said.

    Still, the highest residential collective sale land price last year was only at $876 psf ppr - made by Wheelock Properties in September for The Habitat II in Ardmore Park.

    Areas in Tanjong Katong Road, Meyer Road, Amber Road, East Cost Road and the Telok Kurau area also have good chances, said the head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt.

    The best candidates are developments of six storeys or less, with a small number of units or a large plot of land, said DTZ's Ms Tang.

    'Those with facilities would have good rental value so the owners won't be very motivated to sell,' she said.

    Credo Real Estate's executive director, Mr Karamjit Singh, said: 'The poorer the physical conditions, the better the chances.'

    Surroundings also play a part. For instance, a low-rise development in an area with mostly high-rise projects could be a strong target, he said.

    It could be tricky for mixed developments as shop owners may not want to sell. 'The revenue they derive from the shops may be much better than the property's value,' said Ms Tang. 'If they move out, they will lose the goodwill they have established over the years.'

    Consultants said many former HUDC estates like Pine Grove, Gillman Heights and Farrer Court have expressed interest in selling collectively.

    So have some owners of ageing private properties such as Grand Tower in Moulmein Rise, Eng Tai Mansions at St Thomas Walk, Peck Hay Mansion in Cairnhill and The Ardmore at Ardmore Park.

    But getting enough owners to agree to a collective sale could take years. 'It's a waiting game,' said Ms Tang.

    A home owner Gerald sold his Parry Gardens home near Yio Chu Kang in 1993, even though a neighbour said there may be plans to sell en bloc.

    'I missed out on making money but the deal was only concluded in 2005! I would have had to wait for more than a decade,' he said.

  2. #2
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    May 2006


    Two more sites offered for collective sale
    Freehold properties Hilton Towers, Katong Shopping Arcade go en bloc

    March 2, 2006


    THE en bloc sale bandwagon continues to gain momentum. Two more collective sale sites were launched yesterday - Hilton Towers at Leonie Hill with a $77 million price tag, and Katong Shopping Arcade with a $22 million indicative price. Both are freehold properties.

    And over in the Dunearn Road area, SingTel has launched its residential development site at 1 Hillcrest Road. BT reported last week that the asking price is about $95 million. The 256,486 sq ft site comprises two land parcels - one with a remaining lease of about 85 years and the other with 75 years. The successful bidder will have to pay the state almost $40 million - comprising a premium to top up the lease to 99 years, and another to change the site's use from utility to residential. The expected $95 million land price plus the near-$40 million payment to the state works out to a unit land price of about $375 psf of potential gross floor area. Provisional approval has been granted for two-storey, strata landed terrace houses with a 1.4 plot ratio - the ratio of potential gross floor area to land area.

    Market watchers say the successful bidder could instead apply to the authorities to develop a five-storey condo with a 1.4 plot ratio. Based on the $375 psf land cost, the breakeven cost works out to about $650 psf for a condo and $1.45 million per strata terrace house.

    Jones Lang LaSalle is handling the tender for the property, which closes on March 29. A SingTel spokesman said the sale is in line with its strategy to better utilise capital and free up cash that can be redeployed in its telecommunications business or new investments. Hilton Towers' $77 million price tag works out to be $843 psf of potential gross floor area inclusive of a $3.9 million development charge (DC) and about $600,000 payable for a neighbouring 816 sq ft plot that now houses an electrical substation. Hilton Towers has a 33,700 sq ft site area.

    The subject is zoned residential with a 2.8 plot ratio. Colliers International, which is marketing the site, says expressions of interest close on March 30.

    Boutique developers more keen on the Guillemard and Tanjong Katong area may be interested in Katong Shopping Arcade. The $22 million indicative price works out to about $300 psf per plot ratio including a $1.5 million DC. Under Master Plan 2003, the property can be redeveloped into a residential project with commercial use on the first storey at a 2.8 plot ratio. DTZ Debenham Tie Leung is handling the tender for the property, which closes on March 30.
    Last edited by Admin; 25-08-06 at 07:26.

  3. #3
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    May 2006


    Tender for Eng Lok Mansion draws 8 bids
    Highest offer of $128m works out to new record of $1,130 psf ppr


    THE tender for the freehold Eng Lok Mansion, near the Botanic Gardens, has attracted eight bids. And the highest offer - said to be about $128 million - works out to a record $1,130 per square foot per plot ratio.

    The top bid for the Napier Road property is believed to have been placed by parties linked to former Parkway Holdings boss Tony Tan, working with Penang's Island Hospital group in which Mr Tan's family has a stake. Parkway Group is also understood to have placed a bid, of about $120 million.

    Based on the $1,130 psf ppr top bid, the breakeven cost for a new condo would be about $1,500 to $1,600 psf.

    If $1,130 psf ppr is indeed the highest bid and the property is awarded to the top bidder, it will pip the highest-ever unit land price for a freehold residential site in Singapore - $1,122 psf ppr that Hong Leong Group paid in April 1997 for Boulevard Hotel, which has been approved for redevelopment into a condo.

    The highest-ever unit land cost for a collective sale so far is $1,093 psf ppr paid by Far East Organization in January 1997 for Scotts Tower.

    Incidentally, Eng Lok's top bid also busts the recent high of $1,058 psf ppr set last month when Far East bought Angullia Mansion.

    'But the difference is that the Angullia Mansion site can be redeveloped up to 36 storeys high, whereas the Eng Lok site has a 10-storey height limit. So the price for Eng Lok does seem high,' says a market watcher.

    But others beg to differ. Wheelock Properties (Singapore) CEO David Lawrence, whose company was not among the bidders for Eng Lok, said: 'Our Grange Residences project has proved that the location is extremely popular.'

    Mr Lawrence, who is also chairman of UK-based property consultancy Hamptons Group, said: 'Singapore is becoming increasingly attractive to invest in. I am surprised by the level of interest from UK, Irish and German investors asking me about investing in Asia, particularly Singapore. Already, I have an Irish group asking me if they can buy a lot of units in Scotts Square. Singapore is looking very attractive as an investment location for international investors.'

    Besides often-cited factors like good government, 'Singapore is seen as a place where a lot of the emerging middle class money from China and India will go to. They see Singapore as a place that will do very well for the next 10 years', Mr Lawrence added.

    Scotts Square is the new project that Wheelock will develop on the Scotts Shopping Centre and The Ascott serviced residences site.

    The tender for Eng Lok Mansion closed on Tuesday. The other bidders are said to include CapitaLand, Lippo Group and Simon Cheong's SC Global.

    Market watchers say Parkway Group's bid of $120 million is probably conditional on the site being re-zoned from residential to healthcare use, since it could then build an extension to its Gleneagles Hospital next door to Eng Lok Mansion.

    The 70,810 sq ft Eng Lok Mansion site is zoned for 10-storey residential use with a 1.6 plot ratio (ratio of potential maximum gross floor area to land area) under Master Plan 2003. But marketing agent CB Richard Ellis (CBRE) was reported as saying in December last year that 'alternative development options could possibly be explored with the relevant authorities due to its strategic location'. At the time, it was suggested that alternative uses could include hospitals, medical suites or a hotel. BT understands that Eng Lok Mansion's owners submitted an application to the Urban Redevelopment Authority (URA) to explore some of these alternative uses, most likely hospital, but that URA recently rejected the application.
    Last edited by Admin; 25-08-06 at 07:26.

  4. #4
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    May 2006


    Published March 9, 2006

    Not all en bloc sales fetch high prices
    Market is segmented and upswing confined to selected projects, say property watchers

    HOMEOWNERS thinking about cashing in on their properties through the hot collective sale market should not assume that every sale would fetch handsome returns.

    Property consultants say that despite the recent highs reached for collective sales of properties, it is not an across-the-board phenomenon.

    The recent sale of Eng Lok Mansion along Napier Road made waves, as the freehold property went for $138 million or $1,218 per sq ft per plot ratio (psf ppr) - making it the most expensive collective sale site ever. Far East Organization's $120 million, or $1,058 psf ppr land price last month, for Angullia Mansion also created a stir, as its price was 65 per cent higher than the $643 psf ppr that Wheelock Properties paid in December for Angullia View, just opposite Angullia Mansion.

    A check of successful collective sales transactions that were publicly announced this year showed that over $1 billion worth of property, or around 10 sites, has been sealed to date. Over 25 sites have been launched for collective sale so far this year.

    Owners excited

    Knight Frank's executive director Foo Suan Peng estimates that 50 to 60 estates are considering going down the collective sale route, although not all will eventually take off.

    'Because of a few high profile sales, owners are getting excited. Because they get excited, everybody starts exploring and putting their estates on the market,' he says.

    Investment sales of property are seen by developers and big investors as a bellwether of confidence in the real estate market in the medium to long term.

    While there's no denying that the market has taken a turn for the better, property watchers cautioned that it is still segmented and confined to selected projects.

    As they say, property is all about location, location and location. But home sellers in the prime district 9 and 11 areas can't guarantee that developers will necessarily bite when offers are made.

    'When you say prime, it must be around the stretch from Scotts Road and Orchard Road vicinity. Some district 9 and 11 are not that fantastic,' Jones Lang LaSalle's regional director and head of investments Lui Seng Fatt said.

    He notes that some homeowners are seeking prices northwards of $1,000 psf ppr, which is not always realistic.

    'Angullia Mansion by itself has factors that others cannot provide, because of its address, its being next to Four Seasons Park, and so on,' he explains.

    But already industry insiders see a glut of collective sale candidates. 'To a certain extent, developers are inundated with sites. Over the next few months, they will perhaps become more choosy and the success rate will decrease,' cautions CB Richard Ellis' executive director Jeremy Lake.

    Still, developers will compete for good sites as they look to replenish their landbank, especially before land prices rise even further.

    'There's strong demand for good sites, so there's competition, which means that the price you pay may not be determined by what the owners want but what the next guy is going to bid,' Mr Lake says.

    Besides the sale of Amberville, also to Far East recently, Mr Lui expects collective sales of other HUDC sites to be tough as developers don't favour large sites.

    The strategy, he says, is for developers to go for sites with half a million sq ft of potential gross floor area or less, so that the project can be sold in one phase and the developers can move on to another project.

    With the recent hike in development charge rates announced last month, property consultants say breakeven costs for developers are affected. The costs may be absorbed by the properties' buyers for a coveted site, but sellers might be forced to bear part of the burden when the collective sale market becomes a buyer's market.

    Still, the consultants believe that the market fundamentals are there to allow the collective sales market to keep growing, albeit largely confined to the top-end market.

    Foreign buyers

    It helps that there is foreign buyers' presence. Knight Frank's Mr Foo believes that foreigners' willingness to buy will boost developers' confidence in offering higher land bids.

    'The presence of foreigners in the market, whether they be buyers of new units or whether they be buyers of land, is a sign that the market is strong,' CBRE's Mr Lake concludes.
    Last edited by Admin; 25-08-06 at 07:27.

  5. #5
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    May 2006

    Default Latest freehold plot at Skyline Angullia expected to fetch at least $100m

    Published March 13, 2006

    Property agents race to launch prime sites
    Latest freehold plot at Skyline Angullia expected to fetch at least $100m


    PROPERTY agents continue to rush launches of prime residential sites. Cashing in on its recent successful sale of Angullia Mansion, DTZ Debenham Tie Leung is releasing another plot in the location for sale - Skyline Angullia.

    Angullia Mansion: Sold last month for $1,060 psf ppr. The nearby Skyline Angullia is targeting $1,073 psf ppr

    The latest property, with a 35,810 sq ft freehold land area, should fetch at least $100 million, working out to $1,073 psf per plot ratio (psf ppr) inclusive of a development charge (DC) of about $7.6 million.

    Angullia Mansion, sold last month to Far East Organization, fetched about $1,060 psf ppr including DC. That was a collective sale, whereas Skyline Angullia, completed in 1992, is held by a single party, Skyline Investment Holdings Pte Ltd, controlled by Kang Swee Liat and his wife.

    They developed the property, completing it in 1992 and have kept it since for rental income. The boutique property group also developed houses along Barker Road in the 1980s.

    The existing Angullia Skyline is a 14-storey tower comprising 22 apartments and two penthouses. It has achieved 'very high occupancy since its completion in 1992', DTZ said.

    The site is zoned for 36-storey residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). The site may be redeveloped into a new project with about 45 units averaging 2,000 sq ft, according to DTZ.

    Property agents are racing to launch collective sales and other residential sites in Singapore's prime districts, as they ride on developers' current large appetite to replenish landbank in these areas. This is being fuelled by strong demand led by foreigners in the luxury housing sector.

    Earlier last week, DTZ launched the tender for Hilltops Apartments in Cairnhill Circle and some adjacent terrace houses.

    CB Richard Ellis is expected to launch soon the collective sale of Beverly Mai, an 80,000 sq ft freehold site in the Orchard Boulevard area, having secured the requisite minimum consent levels from owners. Sources said that the owners are hoping to achieve close to $250 million or $1,190 psf per plot ratio including DC.

    And in the Grange Road area, BT understands that collection of signatures from Lucky Tower owners' is at an advanced stage. Astoria Apartments at Cairnhill Rise and Futura at Leonie Hill are among the other prime district sites expected to be launched this year.

    DTZ director Tang Wei Leng said: 'There's a race to push out all the high end sites as we may not achieve our reserve prices as the market reaches saturation point.'

    Competition among sites in the prime districts is set to intensify. 'Run of the mill sites will come under greatest pressure, whereas sites with some unique selling points may have some room still to ride on sentiment,' she added.

    However, CB Richard Ellis executive director Jeremy Lake reasons that the profile of bidders for different-sized sites varies. 'Somebody who might bid for a $40 million site may not be interchangeable with a developer who can bid for a $200 million site. So while there may be quite a few sites, they may not necessarily be in direct competition for the same buyers,' he said.

    'But clearly, developers faced with more choice may prefer to be slightly less aggressive than in the past. Buying interest is still quite strong, but going forward, the sites that will be successful will be the ones that are more desirable. If your site is less desirable, or overpriced, you may get left behind,' added Mr Lake.

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    May 2006

    Default Duchess Court up for sale again

    Published March 16, 2006

    Duchess Court up for sale again


    AFTER two earlier attempts at a collective sale in 1997 and 2000, the owners of Duchess Court in the Bukit Timah area are once again teaming up to sell their homes. This time, the price tag is lower, with marketing agent Credo Real Estate saying the expected figure is $100 million to $108 million.

    Third try: The current expected price tag is between $100-$108 million compared to $160 million in 1997 and $130 million in 2000
    This compares with price tags of $130 million in 2000 and and an even higher $160 million during the first attempt in 1997.

    Based on the current price expectations, the land price for the 999-year leasehold property works out to between $563 and $601 psf of potential gross floor area including an estimated $20 million in development charges. 'At this price, the developer should be able to break even at about $880 to $925 psf or so for a new condo development on the site,' said Credo executive director Karamjit Singh.

    The site is zoned for residential use with a 1.4 plot ratio and a five-storey maximum height. Mr Singh drew attention to two nearby low-rise units at Astrid Meadows on Coronation Road West which changed hands in December and January for $1,000 psf and $1,020 psf respectively - which he described as 'an impressive feat for a 16-year-old development'.

    Assuming Duchess Court fetches $108 million, owners of the 36 townhouses and maisonettes stand to receive between $2.58 million and $3.5 million each - or about 75 per cent more than the $1.45 million to $2 million that they will individually fetch.

    Given that Duchess Court has 36 owners currently, the 152,250 sq ft land area of the property works out to an average of 4,230 sq ft per owner. 'That's almost equivalent to the minimum size required to build one detached house and must make it among the highest land area per owner ratios among recent collective sales,' said Mr Singh.

    The tender closes on April 18.

  7. #7
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    May 2006

    Default Who is afraid of the rate hikes?

    Who is afraid of the rate hikes?

    Experts give their views how rising development charges will affect land sales

    Weekend March 4, 2006

    shobha Tsering Bhalla
    [email protected]

    EVEN as market watchers warn of a slow down in en-bloc sales and the redevelopment of certain areas of Singapore such as the Central Business District (CBD) following the recent hike in development charge (DC) rates, some property developers say they would not be deterred if the properties were in the right location.

    They will "factor in the higher DC rates in their bid prices and also be very eager to lock in the prevailing DC rate once they have bought the site", said Mr Jeremy Lake, executive director, Investment Properties, CB Richard Ellis.

    Development charge refers to the tax imposed by the Government to enhance land use. DC rates, which are revised every six months, are closely tracked in the industry as they reflect property values and have a direct impact on the breakeven costs of developers seeking to redevelop sites.

    A senior executive from one of Singapore's top four property developers said if the property were in a prime area such as Bukit Timah, Districts 9 and 10 and the East Coast, they would continue to buy.

    "The big boys will not see the rate hikes as an obstacle but the smaller players might. We're still 40 per cent off the peak (in property prices) so big developers will look at the potential not at the cost."

    But, the buying would not continue at the same pace as they would be more selective," said the executive.

    In agreement, Knight Frank's head of research & consultancy Nicholas Mak said the higher rates would mean owners would get less "so they may be less eager to sell."

    Underscoring this view is the fact that the prime districts the epicentre of such sales have seen some of the biggest DC rate hikes. They range from an increase of 7 per cent in the Oxley and Leonie Hill area to 19 per cent in the Ardmore Park/Draycott area.

    The quantum of the rate hikes this time was a shock to industry watchers who say they are much higher than the rise in property prices over the last two quarters.

    "I was taken aback because the transacted prices have only gone up by 0.8 and 0.9 per cent for landed and non-landed properties. Whereas the DC rate hike for non-landed residential property was an average of 9.4 per cent and 4.6 per cent for landed," said Mr Colin Tan, head of research & consultancy at property consultancy Chesterton International.

    "The DC rate is supposed to take into account the transacted prices this rate hike is out of sync as it's more than twice that of property price increases. So what is the basis for calculating the DC rate?" he said.

    Some of the DC rate hikes announced this week are the biggest in six years. The highest increases have been for non-landed residential rates in the CBD by as much as 20 to 33.3 per cent, which experts say could deter owners of old office buildings from developing them for residential use.

    Explaining the rationale for the rates, a spokesman for the Chief Valuer who sets the rates said as these rates need to closely reflect the land value within each sector at the time of review, "they cannot be merely adjusted based on property price index (PPI)".

    "The adjustments are not even for all the sectors due to the different levels of market activities and interests across all sectors. If the rate hike for a particular sector is steeper than the actual market trend it could be because the previous rate adjustment for that sector was too conservative," said the spokesman.

    Still, the stiff rate hike has few fans. "It's a zero sum game if the DC quantum goes up and the absolute land value and residual land value that owners can look forward to receiving would go down correspondingly," said Mr Karamjit Singh, executive director of Credo Real Estate which specialises in collective sales.

    But while the rate hike will cause a slow down in en bloc sales, it could have the beneficial effect of slowing down the "frantic" pace at which land is being bought by developers. "They would need to slow down by mid-year or the third quarter as the pace at which land is being bought is unsustainably high," said Mr Singh.

    "Historically, the market has only been able to absorb that many units but the amount of land that has been bought over the last few months show that they would yield far more units than can be absorbed."

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    May 2006

    Default Amberville sale is unlikely to be repeated, say analysts

    Amberville sale is unlikely to be repeated, say analysts

    AS the first HUDC estate to be sold through the en-bloc route, the Amberville acquisition by Far East Organization earlier this week is a milestone in the collective sale market and no doubt a shot in the arm for owners of aging HUDC estates.

    But while the price set by Far East's $396 per sq ft bid for the estate is higher than expected, other HUDC owners should not expect a similar price or even similar interest for their estates say experts.

    Amberville, which cost Far East a total of $183 million, is the first privatised HUDC estate to be sold en bloc and is believed to have attracted bids from three other major developers City Developments, MCL Land and Wing Tai.

    The 218,435 sq ft site can be redeveloped into a condo with 530 units measuring 1,200 sq ft on average.

    Far East is estimated to have paid a development charge of $35.2 million and $23.8 million to top up the site's lease

    While it is definitely a "benchmark price", the amount that Far East paid for Amberville "can't be used as a referral point for the prices of other HUDC estates because Amberville was unique", said Mr Foo Suan Peng, executive director & head of investment sales at Knight Frank which brokered the sale.

    None of the other prospective HUDC estates are in as desirable a location as Amberville with its "breathtaking sea view and long frontage", he said.

    Agreeing, Knight Frank's head of research & consultancy Nicholas Mak said other HUDC estates were not very near MRT stations, were surrounded by HDB estates and without any sea views, "so definitely the price would be quite different".

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    May 2006

    Default Newton Meadows up for en bloc sale

    Published March 28, 2006

    Newton Meadows up for en bloc sale

    THE en bloc fever is infectious - this time, the owners of the freehold Newton Meadows have caught it. Sources say the price expected is about $75 million, or about $680 per square foot of potential gross floor area inclusive of an estimated $6.9 million development charge.

    Based on this, the breakeven cost for a new condo is about $900-$950 psf, say analysts. The 42,886 sq ft elevated site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). The plot can be redeveloped into a 36-storey condo with about 95 units averaging 1,300 sq ft each.

    Assuming the 10-storey Newton Meadows does fetch $75 million, owners of the existing 28 units stand to receive about $1.4 million to $3.5 million in proceeds, depending on the size of their units, which range from about 1,200 to 3,600 sq ft. The sums the owners will receive are roughly 60 per cent higher than what the apartments would have fetched if sold individually.

    Jones Lang LaSalle is marketing Newton Meadows through an expressions of interest exercise that closes on April 27.

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    May 2006


    Published March 28, 2006

    Centrepoint highest bidder for SingTel site
    Award delayed as SingTel seeks to reduce premium payable to state


    CENTREPOINT Properties has emerged as the highest bidder for SingTel's former warehouse site on West Coast Road, but its award has been delayed as SingTel is seeking to reduce the amount of differential premium (DP) payable to the state for the change of status of the site, BT understands.

    Sources say Centrepoint's top bid of about $220 per square foot per plot ratio (psf ppr) is inclusive of an estimated $40 million payment to the state.

    The payment to the state comprises an estimated $30 million DP for a change in the use of the site from industrial to residential and about $10 million as lease upgrading premium, to top up the site's lease from the remaining tenure of about 66 years to 99 years.

    Provisional approval has been granted for the site to be redeveloped into a 225-unit, five-storey condo, with a 1.4 plot ratio (ratio of potential gross floor area to land area).

    Originally, the successful bidder was supposed to make the payment due to the state. However, Centrepoint's bid is for a lump sum of about $220 psf ppr, which includes the land price payable to SingTel as well as the DP and lease upgrading premium payable to the state. So if SingTel is successful in negotiating a lower DP, Centrepoint will accordingly adjust upwards the land price component it will pay to SingTel.

    As a market watcher put it, 'Either way the total cost to Centrepoint is locked at $220 psf ppr. So if there is a reduction in DP, SingTel will get a higher price for its land. Hence, SingTel has an incentive to try and negotiate the DP downwards.'

    Credo Real Estate, which handled the tender for the West Coast site, declined to comment when contacted.

    BT understands a similar situation may arise for SingTel's site at the corner of Hillcrest and Dunearn roads, currently on the market.

    Here, the successful bidder will pay the state almost $40 million, comprising a $35 million DP to change the site's status from 'utility' to 'residential' and around $5 million for upgrading the property's lease to 99 years.

    In this case, industry watchers say that although the site is currently zoned 'utility', the price at which SingTel bought the property - which it has been using as a training centre - worked out to a price that reflected commercial land use at the time. Hence, the DP payable should be calculated on the basis of change of use from commercial to residential and not from utility to residential, goes the argument. The former scenario should result in a substantially lower DP.

    Provisional approval has been granted to redevelop the Hillcrest property into 160 strata terrace houses with a 1.4 plot ratio, although market watchers suggest the successful bidder could instead apply to develop a five-storey condo with a 1.4 plot ratio.

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