Farrer Court’s price tag expected to hit $1.5b
The first collective sale with a price tag of more than $1 billion has now arrived, as Farrer Court goes on offer with an official expected price of about $1.5 billion - around $850 per square foot of potential gross floor area.
Sources say the reserve price is $1.2 billion, or slightly over $700 psf per plot ratio (psf ppr) inclusive of around $460 million payable to the state for enhancing the intensity of the District 10 site to a 2.8 plot ratio and for topping up the site’s lease from a remaining term of about 69 years to 99 years.
Market watchers say that more billion-dollar collective sale properties could come on the market this year - including The Claymore in the prime Claymore Road area and Neptune Court at Marine Vista - if some owners in these estates have their way.
Farrer Court is a privatised HUDC estate. Its $700 psf ppr reserve price and $850 psf ppr official expected price look reasonable compared with the $1,062 psf ppr that GuocoLand paid last month for the freehold Leedon Heights, according to some property players.
However, the sheer extent of the Farrer Court site and the huge outlay involved mean that it will appeal to only big players.
Whether at the reserve price of $1.2 billion or the officially expected price of $1.5 billion, Farrer Court has the highest asking price for a collective sale yet attempted.
At 838,488 sq ft, it has the biggest land area for an en bloc sale site.
The maximum potential gross floor area of almost 2.35 million sq ft for the site - or about 1,800 apartments averaging 1,250 sq ft - means that a new development on the site would be the largest condominium development yet to be undertaken in Singapore, according to Farrer Court’s marketing agent Credo Real Estate.
The all-in land cost alone to the successful developer will amount to $1.662 billion based on the $1.2 billion reserve price - or $2 billion if the sellers get their $1.5 billion officially expected price. Construction costs, fees, interest and holding costs could add a further $1 billion to $1.1 billion.
Despite the huge outlay involved, Credo is confident of the site being sold.
Credo executive director Tan Hong Boon says ’several large developers have been following up closely with us on the progress of Farrer Court for a few months’.
The property consultancy’s managing director, Karamjit Singh, sees bids for the site coming from developers partnering one another or with equity investors.
‘I think larger developers will see the value of what Farrer Court has to offer - the site has the characteristics for an iconic huge development like Reflections at Keppel Bay, involving big-name architects,’ Mr Singh said, adding that ‘Farrer Court’s reserve price is reasonable’.
Market watchers estimate the $1.2 billion or $700 psf ppr reserve price will result in a break-even cost of about $1,200 to $1,250 psf for a new luxury project on the site.
They also reckon that achieving an average selling price of around $1,600 psf or even more for a new 36-storey, 99-year leasehold project on the site in about a year’s time should be possible, based on current market projections.
‘Farrer Court is very unique in that it is the only private residential site in the Farrer Road and Holland Road vicinity that is accorded a high plot ratio of 2.8 and a height control of up to 36 storeys. Most of the surrounding sites are either landed housing, low or medium-rise developments up to five or 12 storeys,’ Mr Tan notes.
More than 80 per cent of owners of Farrer Court have signed the collective sale agreement (CSA). Rodyk & Davidson is representing the majority owners.
BT understands that based on the $1.2 billion reserve price, owners will receive $1.9 million for the smaller units of 1,453 sq ft and $2 million for the bigger units of 1,615 sq ft.
When signing of the CSA began in September last year, the pricing was slightly above $700 million, reflecting sales proceeds of $1.1 million and $1.2 million for the owners of smaller and bigger units.
Source : Business Times - 15 May 2007
Loading ...
Post a Comment
Tell me a bit about yourself; who you are, where you're from, what information you would like to see on this site. As I continue to provide you with Singapore property happenings, your feedback will encourage me to post more frequently. Thank you.