http://www.businesstimes.com.sg/spec...-bloc-20140403
Published April 03, 2014
Spring Grove gets owners' OK to go en bloc
Requisite 80% consensus reached after offer price raised to $2,600 psf
By lee meixian [email protected]
SPRING Grove in the prime Grange Road area has arrived at the requisite 80 per cent consensus from owners to put the condominium up for en bloc sale.
According to a notice emailed to residents obtained by The Business Times, owners of 264 out of 325 units have signed the collective sale agreement as at March 23, 2014 - representing 81 per cent of the condo's total share value and strata area.
A five-day cooling-off period, imposed after the approval was obtained, has since ended.
Unit owners will receive an average $2,600 per sq ft for their two- to four-bedroom apartments and penthouses, according to Ian Loh, director and head, investment & capital markets at Knight Frank, which is sales agent to the deal, as well as sales committee chairman Joseph Chia.
This was raised from the earlier reported $2,100 psf offered last March.
Asked for a reason to the increase, Mr Chia said: "People just basically don't sign until the price is right.
"When you think about it, with the additional buyer's stamp duties (ABSD) and so on in place, it's very difficult to find a replacement value if you only receive $2,100 per sq ft."
Given that the strata area of the condominium is about 438,576 sq ft, the condominium could hit the market at a reserve price of $1.14 billion, said Karamjit Singh, head of investments and residential at JLL.
The largest successful en bloc sale in Singapore to date is Farrer Court, which was sold for $1.34 billion in 2007.
"There have been other en bloc projects launched for sale in the market, some even bigger than Farrer Court, but all have failed to find buyers," said Christine Li, head of research and consultancy at OrangeTee.
Consultants reckon that pressures from the ABSD and other property cooling measures could affect developers' sentiment and make them hesitant about buying land.
"En blocs happen in cycles and are currently going through a low point. The market outlook needs to be positive before we start seeing more en blocs being successful," Mr Singh said.
OrangeTee's Ms Li thinks the current investment climate and stringent total debt servicing ratio framework, which lower the loan-to-value limits for buyers looking to buy additional residential properties, will make it "extremely challenging to find a buyer at this price level".
"There is still substantial supply along Grange Road in terms of new projects, some of which have not been launched. The number of unsold units in the vicinity is also a concern for potential buyers.
"On top of that, if the developer is not able to sell all the units in the development within five years, they will also be hit by ABSD. The risk will be too much to bear unless current cooling measures are relaxed."
She feels that the more palatable en bloc quantum currently is about $100 million.
Meanwhile, Knight Frank said it will soon begin discussions with the US government, to whom the site will revert back to as freehold land, after its 99-year lease, started in 1991, ends.
Knight Frank's Mr Loh declined to reveal further information, bound by non-disclosure agreements signed and the political sensitivity of the topic, he said.
The notice sent to residents said Knight Frank has up to one year (i.e. before March 22, 2015) to find a buyer and file an application to Strata Titles Board.
Before the site is launched for sale by tender, there will be an owners' meeting to provide information on the sale proposal and the sale process, it also said.