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Ezra Holdings’ Lee family said to be buyer of building at Cantonment Rd

A DEAL is close to being stitched up for the sale of the freehold Euro-Asia Centre in the Hoe Chiang/Cantonment roads location for about $125 million to $130 million, or about $650-$670 per square foot of existing net lettable area, say sources.

The buyer is understood to be linked to the Lee family that controls listed offshore support and marine services group Ezra Holdings.

It could not be ascertained whether the entity likely to be used for the acquisition of the 29-storey building is part of the listed group. It wouldn’t surprise market watchers if Ezra Holdings, whose offices are now at Parkway Parade, moves into the Cantonment Road property given the latter’s location in the traditional Tanjong Pagar/Keppel Road shipping quarter.

What industry observers find interesting about the deal - if it is sealed - is that the buyer is likely to continue to use the property as an office and not convert it to residential use, unlike the owners of some ageing CBD office blocks.

In fact, the building’s marketing agent Colliers International said, when the property with about 193,000 sq ft net lettable area was put up for tender in February, that outline planning permission had been obtained for redevelopment into a 35-storey residential building with commercial use on the ground floor at a 5.6 plot ratio (ratio of potential gross floor area to land area).

The tender for the 29-storey Euro-Asia Centre closed last month. The building sits on a 49,442 sq ft site and has gross floor area of 244,233 sq ft, which is about 4.9 times the site area.

Euro-Asia Centre comprises a 16-storey block completed in 1983 and another 12 floors from the 18th storey onwards completed in 2004. The site is zoned for commercial development in Master Plan 2003 with an allowable gross plot ratio of 5.6 and a height of up to 35 storeys. Euro-Asia Centre, once a jewel in property and shipping magnate PL Kua’s portfolio, is being sold by its mortgagee bank, understood to be OCBC.

Source : Business Times - 10 Apr 2006

Many are being offered at discounts of up to 20%, along with guaranteed tenants

WITH housing prices starting to inch up, home buyers looking for more affordable property might want to turn their attention to completed projects that still have unsold units.

Developers have been cutting the prices of these units - some of which have sat unsold for almost 10 years - in an attempt to offload them as soon as possible.

Many of these condominiums are now going at a discount of as much as 20 per cent from their original sales price when they were first released for sale.

Centrepoint Properties’ Yishun Sapphire, for instance, is now priced at about $420 per sq ft, down from about $520 psf when it was launched in 2000. Slightly more than 300 units in the 380-unit development have been sold over the past five years.

Over in the east, Bonvests Holdings relaunched its 189-unit The Trumps at Kemban- gan late last year at $550 psf, compared with $640 psf during its launch in May 2001.

The Straits Times understands that about 30 per cent of the units at The Trumps are still available for sale.

Apart from offering price discounts, some developers are adopting more creative marketing strategies in a bid to attract hesitant buyers.

Those who purchase units with the intention of renting them out are being offered guaranteed leasing schemes, in which developers commit to providing a tenant and a specific rental yield.

The Trumps and Cheung Kong’s Cairnhill Crest are two projects that recently relaunched unsold units with such schemes.

At The Trumps, investment buyers are guaranteed a 5 per cent rental yield per year, while Cairnhill Crest buyers who choose to take up the rental scheme can get an average yield of 4.2 per cent annually.

However, some developments are now taking advantage of a recovering market to maintain prices at their launch levels.

Allgreen Properties’ Kerrisdale at Serangoon, which was released for sale last year, has kept prices at about $480 psf despite having more than 100 units still unsold.

However, these units might still attract home buyers who urgently need to move into a new home and cannot afford to wait years for a development to be completed, which is often the case for newly launched projects.

For the most part, property consultants said that developers are keen to sell off these unsold units as soon as possible because most of them are 99-year leasehold properties that have already been completed.

‘Particularly for leasehold properties, the developers would not want to wait too long as the tenure clock is ticking and design obsolescence will also set in,’ said Dr Chua Yang Liang, the head of Singapore research at property consultancy Jones Lang LaSalle.

‘The longer the unit is kept out of the market, the less appealing it becomes.’

Source : Sunday Times - 9 Apr 2006

Q MY FATHER bought a private landed property in his name a few years ago and subsequently added my name as a co-owner with a 30 per cent share.

I have since been contributing to the loan repayments through my Central Provident Fund (CPF) account.

My father is now 76 and he has a wife and five children, including myself.

What will happen to the property if my father dies before I do or I die before he does, assuming that there is no will?

Will the house be force-sold after one of us dies and if so, who will get the money? Will there be a 70:30 split of the sale proceeds according to the percentage of the property ownership?

If my father wrote a will to distribute the money equally to his wife and five children, what will happen to the CPF money that I used to help pay for the loan?

A A PROPERTY can be held either under a joint tenancy or tenancy-in-common. Under a joint tenancy, when an owner dies, the surviving joint owner(s) takes ownership of the property completely.

A joint owner cannot will away his ’share’ of the property because there are no distinct shares to begin with.

In the case of tenants-in-common, each owner holds a distinct share. When one owner dies, his share goes to the beneficiaries named in his will.

If he did not make a will, it would be distributed according to the Intestate Succession Act (for non-Muslims) or the Administration of Muslim Law Act (for Muslims).

As you hold a specific share of 30 per cent, I shall assume that you and your father are tenants-in-common.

If your dad passes away before you and there is no will: Your mother will receive half of his 70 per cent share and the balance will be distributed equally among his five children. Your share would thus be more than your original 30 per cent.

If you die before your dad and you do not leave a will: Your 30 per cent share of the property will also be distributed according to the Intestate Succession Act.

The eventual distribution will depend on whether you are married and/or have children.

If you are not married and have no children, your parents will be entitled to your share in equal proportions.

Will the house be force-sold upon the death of you or your father? No - unless you or the owners are unable to continue to pay the outstanding mortgage.

If the house is sold, let’s assume that after the outstanding loan is paid and all monies are refunded to the respective CPF accounts, there are surplus proceeds. Then, as a general rule, the proceeds would be distributed according to each party’s, or each beneficiary’s, share.

I note that although you did not provide any consideration for your father to add you as a co-owner, you have been making financial contributions towards its acquisition through your CPF payments. This would entitle you to a share of the property.

If your dad had made a will, he would only be able to state in the will the names of the beneficiaries of his estate.

He would not be able to dictate how the sale proceeds are to be distributed simply because he cannot compel you to sell your share of the property.

Generally, the property can be sold only with your consent.

Assuming you agree to sell, the CPF Board would require all monies used from your CPF account to be returned to that account (provided you are under 55 years of age) before it gives its consent to the sale of the property.

The only exception is where the charge by the bank ranks ahead of the CPF charge (which is common nowadays but was not 10 years ago), and the sale proceeds are insufficient to repay all the CPF monies spent.

You can then seek consent from the CPF Board for you to sell your property with the sale proceeds going to pay off the bank loan first and the balance returning to your CPF account.

In this case, there will not be any monies left for distribution after that.

Vijai ParwaniParwani & Co

Source : Sunday Times - 9 Apr 2006

Its approval needed as it controls over 50% of share values

The National University of Singapore is getting some en bloc heat from some of the other apartment owners at Gillman Heights Condo.

The university - which holds the key to a collective sale as it controls slightly more than half of share values in the project - is being pressured to finalise an agreement soon to launch a sale of the privatised HUDC estate.

BT understands that the university had earlier indicated it would not hold up a collective sale but is still studying the terms for a sale. However, some of the other owners fear it may take too long and they could miss the en bloc boat if developers decide to slow down on landbanking.

If NUS gives the nod, the owners of the privatised HUDC estate would secure the minimum 80 per cent consent level to put the 836,425 sq ft leasehold site on the market.

BT understands NUS owns 305 apartments in the condo, which comprises four high rise blocks of 24 storeys each with a total of 455 units and six low-rise blocks with 152 maisonettes. There is also a shop unit, bringing the total number of units in the development to 608.

Sources say the asking price of about $528 million works out to a unit land price of $323 per square foot of potential gross floor area, including an estimated $36 million payable to the state for upgrading the site’s lease to 99 years from a remaining tenure of about 78 years and a further payment of $3.5 million for a slight enhancement in plot ratio.

The site is zoned for residential use with a 2.1 plot ratio (ratio of potential gross floor area to land area).

NUS told BT it has yet to make a decision. ‘It is to our understanding that the proposed en bloc sale of Gillman Heights was initiated by some residents living there. The university is evaluating the information and would be taking this up with our management and Board of Trustees before making any decisions on whether to agree to the collective sale of the residential property.’

On average, owners stand to receive $870,000 per unit which is about 50 to 60 per cent more than the average value of what their units would fetch if sold individually.

The NUS spokesman said the university’s apartments at Gillman Heights provide off-campus accommodation for some of its staff and graduate students. ‘If necessary, and when appropriate, the university will then proceed to help them source for alternative accommodation,’ he added.

Even if NUS gives the nod, and the collective sale is launched, it remains to be seen what sort of response the exercise will garner.

While developers have been snapping up land over the past six months or so, they’ve focused on the prime districts in response to a strong recovery in home buying in the luxury residential segment. As well, the Gillman Heights site is huge - a new project on the site can house around 1,400 apartments averaging 1,300 sq ft.

Not many developers have the financial muscle for such a big project. And even if they do, they may not wish to put all their eggs in one basket.

Also, the asking price set by the owners, which works out to a unit land price of $323 psf per plot ratio, would translate to a relatively high breakeven cost of at least $500 psf for the developer, say market watchers.

Source : Business Times - 7 Apr 2006

A FAMILY of three were yesterday ordered to vacate their three landed properties in Bukit Timah after OCBC Bank won its case to get them to repay a multi-million-dollar loan.

Mr Moey Keng Weng, former chief financial officer of Malaysia-Singapore Airlines, the forerunner of SIA; his wife, Madam Chang Chi Lan; and daughter Meng Yee, had tried a novel defence to avoid repaying the loan, which now stands at more than $23 million.

Instead, the family lost its case, and was given a week to vacate two of its three houses at Jalan Ampang.

They were given three weeks to get out of the third house, because they currently live in it.

The saga began in 1996, when Mr Moey developed the plot of land to build four bungalows. The daughter took a $15 million overdraft.

In 1998, when they exceeded the overdraft limit, they refinanced one of the houses.

That year, Tat Lee merged with Keppel Bank. The new entity, Keppel TatLee Bank, started legal action against them in April 1999 to recover the money but did not follow through.

In 2001, Keppel TatLee merged with OCBC Bank. OCBC sued the family to recover the money in 2002.

When the trial started last week, the family’s lawyer, Mr Andre Arul, relied on a novel defence. He argued that OCBC had no right to recover the loan because it was not a party to the original transaction.

The Banking Act states that the undertakings of the original banks shall be ‘transferred to and vest’ in the new bank.

But Mr Arul argued that a debt written off before a merger cannot be transferred to a successor bank since it has been cancelled. The family claimed the debt had been written off by Tat Lee.

However, OCBC maintained that the debt had not been written off. It said Mr Moey had ‘fabricated’ a story about being told by Tat Lee representatives that the debt was written off.

Mr Moey claimed that former Tat Lee chairman, Mr Goh Eng Chew, a golfing buddy, told him that it had been written off.

Mr Moey said that when he met two Tat Lee bank officers, they nodded when he told them what Mr Goh said. But one of the officers has given evidence to the contrary.

OCBC argued that even if the debt had been written off, the bank could still sue to recover the money. A write-off is merely an ‘internal accounting entry’ - not the same as ‘forgiving’ a debt which means a mutual agreement where the bank waives the debt, on some condition.

Yesterday, Justice Tay Yong Kwang agreed with OCBC’s lawyers that the family had to pay up. He also ordered the family to pay the legal costs.

Source : Straits Times - 5 Apr 2006