Pinetree owners offer option of cash or units in collective sale
ANOTHER collective sale has hit the market, but this time with a twist: the owners are happy to forgo the cash in exchange for units in the posh project that will go up.
But developers can also opt to pay cash for the freehold Pinetree Condominium, which is asking close to $59 million or about $888 per sq ft per plot ratio (psf ppr).
The 50 owners of the condominium along Balmoral Park are offering the unit exchange following a similar deal at Paterson Lodge, where 20 owners ‘traded in’ their units for apartments in the new project.
If a developer acquires Pinetree under the exchange scheme, it will have to pay only for the new condominium’s construction costs. It will not incur land costs and the site does not require a development charge.
The developer makes his profit by building more - and pricier - units than on the existing site.
But the exchange trend is unlikely to become popular given the logistical difficulties, said Mr Foo Suan Peng, executive director at property consultancy Knight Frank.
‘First, this requires consent from all the owners, and not just the 80 per cent minimum in normal en bloc sales. So the chances of it being replicated in other estates would be higher if the number of owners is small. A manageable size would be about 20 to 30 units,’ he said.
Although Pinetree has more than double the units of Paterson Lodge, most owners have backed a sale or exchange, said Mr Lui Seng Fatt, regional director and head of investments at Jones Lang LaSalle, which is marketing the site.
A developer can build about 60 units with an average area of 1,100 sq ft each on the 41,361 sq ft plot, which has a 12-storey height restriction. It can also expand the site by acquiring four adjacent houses, which can be demolished to build 10 units.
If the collective exchange goes through, Pinetree owners stand to double the value of their apartments on a psf basis. Each unit is worth about $700 psf on the market, while the new units will fetch about $1,400 psf, said Mr Lui.
But these new units will mostly be smaller than the current Pinetree apartments, which range from 1,163 sq ft to 1,873 sq ft.
Source : Straits Times - 30 Mar 2006
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