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Some owners want to remove sales committee

A mediation hearing before the Strata Titles Board opens today, with the task of trying to bring together warring neighbours who have sold their apartments at Horizon Towers on Leonie Hill en bloc for $500 million.

Horizon Towers

Far from coming together, the various sides have hired top-notch lawyers to fight for them. The mediation is set to last for two days, and if there is no agreement possible, the case will go for a full hearing before the Strata Titles Board.

The dispute goes back to January, when almost 84 per cent of owners signed the agreement to sell Horizon Towers to Hotel Properties and two foreign funds for $500 million. That meets the legal requirement of more than 80 per cent of owners assenting to a sale in the case of properties more than 10 years old.

It means each owner of the condo’s 199 units will get about $2.3 million, and the 11 penthouse owners will receive sums of at least $4 million, rising to $6.28 million for the largest unit, of 890 sq m.

A group of 42 unhappy owners who had consented to the sale has called for an extraordinary general meeting (EGM) to remove the sales committee which negotiated and finalised the collective sale. The 42 are calling for a new sales committee to be elected, and they have hired the Wong Partnership law firm to advise them.

A Wong Partnership spokesman confirmed to BT that ‘it is advising some of the subsidiary owners who would like the sales committee changed’.

The 42 say they are not satisfied with the sales committee’s performance, and complain about the committee not canvassing the views of the rest of the owners prior to the sale, despite the improved market conditions. The unhappy group members pointed out that nine months had passed from the time the sales committee had been elected to negotiate the sale and its eventual agreement.

‘Before signing the option, it would be in their (sales committee) interests as well, and since there was a window of opportunity, they could have held a meeting with the owners again and see if we could have concluded a better agreement,’ said one of the 42 owners.

But law firm Drew & Napier, which is handling the collective sale of Horizon Towers, has written a letter to advise the owners that an EGM would not have the power to remove the current sales committee.

And even if a new sales committee is appointed, nothing significant can be or needs to be done by the new sales committee which will have a bearing on the proceedings before the Strata Title Board, the lawyers’ letter said.

Jimmy Yim, senior counsel at Drew & Napier, told BT that in his opinion, an EGM does not have the power to remove the sales committee and since it is now at an advanced stage, there is ‘little more the sales committee can do’.

It is not these two sides alone which need mediation. There are those who have always stood out against the sale, and three of them, including one penthouse owner, have hired Tan Kok Quan Partnership to represent them at the hearing.

Another penthouse owner, Wong Siew Fang, who has been bitterly opposed to the sale from the very beginning, is doing without lawyers and will be presenting her own case at the hearing.

Ms Wong said she will argue that the apportionment of the sales proceeds was not equitable.

‘When you buy property, you pay according to area,’ said Ms Wong who bought her home in 1983. She will get $4 million for her 493 sq m penthouse while those owning 220 sq m will get $2.3 million.

Many of the penthouse owners are resigned to their plight being disregarded just because they are seen as millionaires.

But one question has been answered already. One bit of legal advice sought was whether going against an en bloc sale would somehow be construed as being ‘anti Singapore’ which could in some way see some of those involved lose their permanent residence status.

They have been instructed that in Singapore, ‘you’re entitled to exercise your commercial rights’.

Source :  Business Times - 29 May 2007

MCL Land has emerged as the top bidder for Nob Hill Condominium and two adjoining bungalows on Ewe Boon Road, at a price of $95 million or $1,100 per square foot of potential gross floor area, including an estimated $17 million development charge, according to industry sources.

Nob Hill Condo

The properties, located at a cul-de-sac, have a combined freehold land area of 63,572 sq ft. They are zoned for residential use with a 1.6 plot ratio (ratio of maximum potential gross floor area to land area) and a 12-storey height limit. The plot can be redeveloped into a new project with about 65 units averaging 1,500 sq ft. The tender for the properties closed last week. It was handled by Credo Real Estate, which has declined to confirm the outcome of the tender.

Other recent benchmarks in the area include Eden Spring at Balmoral Road sold at $1,004 psf per plot ratio last month to TG Development, and One Balmoral, sold to Hong Leong Group in March for $1,188 psf ppr.

In its news release last month when launching Nob Hill Condominium and the two adjoining bungalows, Credo had said that since the condo belongs to an investment company, no Strata Titles Board application is necessary.

On the stock market yesterday, MCL ended two cents higher at $2.82.

Source :  Business Times - 29 May 2007

It puts up price of $123m for 99-year plot at Gopeng St next to the Amara

HONG KONG tycoon Li Dak-sum’s Carlton group yesterday emerged as the top bidder for a 99-year hotel site at Gopeng Street next to the Amara Hotel in the Tanjong Pagar area. Carlton put in a $123 million bid.

The only other offer for the site came from Republic Hotels and Resorts, part of Millennium & Copthorne Hotels plc, which bid $118.21 million.

Carlton’s bid works out to $573 psf per plot ratio, which market watchers say is the highest for a 99-year hotel site in recent years.

In November last year, Hong Leong Group bagged a site at Mohamed Sultan Road for $518 psf per plot ratio.

In January this year, Far East Organization paid $501 psf ppr for a hotel plot next to Novena MRT Station.

Mr Li’s son, Richard, who is managing director of Carlton Hotel (S) Pte Ltd, yesterday evening told BT that the group expects to pump a further sum of $140 million in construction costs and fees for its proposed hotel development at Gopeng Street, bringing the all-in cost to around $263 million.

‘We are looking at two scenarios - a limited service hotel with about 400 rooms or a more up-market, hip hotel, with about 380 rooms,’ Richard Li said, indicating that for now, the group is more inclined towards the former option as ‘there are not many of this type of hotels’.

If the group goes for a 400-room hotel, the break-even cost would be $657,000 per room, which hotel analysts say is one of the highest for a hotel development or transaction in Singapore in recent years. ‘For instance, the Intercontinental Singapore last year changed hands for $611,000 per room, and the recent sale of Novotel Clarke Quay was reported at $552,000 per room,’ HVS International Singapore managing director David Ling observes.

Carlton’s bid reflects its confidence in the Singapore tourism sector, he said.

‘The market is conducive for new hotel developments now that we have concrete plans going ahead - two integrated resorts with casinos, Formula 1. These are all positive demand generators coming on line,’ Mr Ling reckons.

Mr Li of Carlton Singapore acknowledges that his group’s bid at yesterday’s state tender was high but ‘we wanted to get the site’, he said.

‘We basically want to do another hotel in Singapore,’ he said. ‘Of course, based on today’s room rates, the venture is not very profitable. But we expect demand to be higher in the years to come.’

Mr Li indicated the group does not have plans for further hotels in Singapore for the time being.

In early 2005, Carlton clinched a plot next to its Carlton Hotel at Bras Basah Road for $55.6 million. It recently began construction on the site for a 300-room extension to the existing hotel.

The total cost for developing the new wing (inclusive of the land price) is about $175 million, reflecting a cost per room of about $583,000. The extension is expected to be ready around 2009.

The 25,543 sq ft site site at Gopeng Street can be developed up to 30 storeys high.

It could be completed around 2010.

Source :  Business Times - 29 May 2007

COLLECTIVE sale via the ‘expression-of-interest’ route can help owners seek better prices for their homes as evidenced by an almost 40 per cent increase in the asking price for Tulip Garden.

Tulip Garden

The condominium, which is at the junction of Holland Road and Farrer Road, was put on the market through an expression-of-interest exercise in January with an indicative price of $900 per square foot per plot ratio (psf ppr), including development charge.

The 316,709 sq ft site was, however, relaunched yesterday with the new indicative price of $1,250 psf ppr, including development charge.

Based on a plot ratio of 1.6 and a maximum gross floor area of 506,734.4 sq ft, the site could fetch over $633 million.

Steven Ming, director of investment sales at Savills Singapore, which is marketing the site, said: ‘We received pretty attractive offers - what would had been benchmark prices for the location. Unfortunately, we were not able to consider them further as we did not have the requisite 80 per cent mandate to do so.’

Heartened by earlier expressions of interest though, 80 per cent of owners at Tulip Garden have now agreed to proceed with a collective sale if its target price is met.

Savills also remains confident that the new, higher, indicative prices could be met. This, despite some developers becoming increasingly wary of owners’ price expectations.

‘It’s a different Singapore today and developers still remain bullish about prospects for the upper end residential sector. For as long as they continue to sell and get good prices for their products, it is unlikely that they will find prices getting too high,’ said Mr Ming.

Last month, Guocoland bought neighbouring Leedon Heights for $835 million or about $1,062 psf ppr, including a development charge.

Next door, Farrer Court was put on the market this month for about $1.5 billion. Including development charge and topping up the 99-year lease, the price works out to be around $850 psf ppr.

It was also reported this month that the asking price for Farrer Court was $900 million three months earlier.

There appears to be sufficient demand for prime sites. BT understands that as many as five developers had earlier expressed interest in Tulip Garden.

Source :  Business Times - 29 May 2007

AS A boy, I used to watch movies of the old wild lawless West where the theme typically centres on decent simple homesteaders being forced out of their homes and land by big cattle ranchers or crooked town planners bent on furthering personal wealth.

Of course, basic human decency almost always prevails in such movies in the form of a drifter cowboy who comes to the aid of these simple folks.

Fast forward to the 21st century in Singapore today where hot property prices have culminated in en bloc deal after deal.

It is not difficult to draw a parallel of the home-losing scenario between then and now. Except that now the process is legalised.

Dissenters of en bloc deals are reportedly subject to alienation by former neighbours, and the last man standing in one particular case had the book thrown at him in a court of law.

Alas, has Singapore come so far to reach the status of a near developed society but at the same time relegated back to a state where defending one’s home could be illegal?

Is it morally right that the en bloc majority law that was meant to facilitate renewal of very old properties is now used to dismantle relatively new properties, and worse still, family lives?

To borrow a phrase from Charles Dickens: ‘A Tale of 2 Cities’ … perhaps one day we’ll look back and say: ‘It was the best of times, it was the worst of times.’

Teo Hoon Seng

Source :  Straits Times - 29 May 2007