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TWO large freehold residential sites have been put on the market through collective sales - Paterson Tower in prime district 9 with a price tag of $280 million, and Rose Garden at Amber Road with a $167 million price tag.

The asking price of $280 million for Paterson Tower, which is being marketed by United Premas, works out to a unit land price of $1,164 per square foot per plot ratio (psf ppr). No development charge is payable.

BT understands, however, that the actual reserve price set by the majority owners of Paterson Tower is much lower. The sale was initiated some months ago, before the recent escalation in land values in the Orchard Road belt, as seen by the sale of the 99-year leasehold Orchard Turn site in December at $1,020 psf ppr and this year’s collective sale of the freehold Angullia Mansion for $1,058 psf ppr.

Paterson Tower was last put on the market in 2000 with a reported indicative price then of $240 million or $996 psf ppr. But the owners failed to get the price they were seeking then.

The 114,547 sq ft plot, on an elevated spot at Paterson Hill, is zoned for residential use with a 2.1 plot ratio (ratio of potential maximum gross floor area to land area). It can be redeveloped into a new 24-storey condo with about 120 units averaging 2,000 sq ft each. Based on the $280 million or $1,164 psf ppr asking price, the break-even cost for a new condo will be about $1,600 psf, say property analysts.

The collective sale proceeds will be split equally among owners of the present 72 apartments. Using a figure of $280 million, they will receive about $3.88 million per unit, which is more than double the $1.85 million to $1.9 million that the apartments could fetch if sold on an individual basis, according to United Premas.

Sources say that the Far East Organization group owns six apartments, equivalent to about 10 per cent of share values in the estate. Far East is not among the majority owners who have so far consented to the collective sale, although BT understands that it may join in when a buyer is found.

Over in the Katong area, Rose Garden in Amber Road was last put on the market in 2003 with a reserve price of $169.2 million, or $422 psf ppr. No development charge is payable. However, owners failed to get the price they wanted back then, when the benchmark for the area was the $372 psf ppr paid for the Sea View Hotel site by Marco Polo Developments, now known as Wheelock Properties (Singapore).

This time around, Rose Garden’s owners feel more hopeful about being able to achieve the price they are eyeing, given last month’s sale of the 99-year leasehold Amberville site for $396 psf ppr. While the Amberville site clinched by Far East boasts a superior location with direct sea views, Rose Garden has the superior tenure.

Rose Garden’s current official expected price of $167 million indicated by marketing agent PropNex works out to $416 psf ppr, although sources say the reserve price the majority owners have agreed to for the latest collective sale agreement is much lower - under $400 psf ppr.

Source : Business Times - 21 Feb 2006