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Award delayed as SingTel seeks to reduce premium payable to state

CENTREPOINT Properties has emerged as the highest bidder for SingTel’s former warehouse site on West Coast Road, but its award has been delayed as SingTel is seeking to reduce the amount of differential premium (DP) payable to the state for the change of status of the site, BT understands.

Sources say Centrepoint’s top bid of about $220 per square foot per plot ratio (psf ppr) is inclusive of an estimated $40 million payment to the state.

The payment to the state comprises an estimated $30 million DP for a change in the use of the site from industrial to residential and about $10 million as lease upgrading premium, to top up the site’s lease from the remaining tenure of about 66 years to 99 years.

Provisional approval has been granted for the site to be redeveloped into a 225-unit, five-storey condo, with a 1.4 plot ratio (ratio of potential gross floor area to land area).

Originally, the successful bidder was supposed to make the payment due to the state. However, Centrepoint’s bid is for a lump sum of about $220 psf ppr, which includes the land price payable to SingTel as well as the DP and lease upgrading premium payable to the state. So if SingTel is successful in negotiating a lower DP, Centrepoint will accordingly adjust upwards the land price component it will pay to SingTel.

As a market watcher put it, ‘Either way the total cost to Centrepoint is locked at $220 psf ppr. So if there is a reduction in DP, SingTel will get a higher price for its land. Hence, SingTel has an incentive to try and negotiate the DP downwards.’

Credo Real Estate, which handled the tender for the West Coast site, declined to comment when contacted.

BT understands a similar situation may arise for SingTel’s site at the corner of Hillcrest and Dunearn roads, currently on the market.

Here, the successful bidder will pay the state almost $40 million, comprising a $35 million DP to change the site’s status from ‘utility’ to ‘residential’ and around $5 million for upgrading the property’s lease to 99 years.

In this case, industry watchers say that although the site is currently zoned ‘utility’, the price at which SingTel bought the property - which it has been using as a training centre - worked out to a price that reflected commercial land use at the time. Hence, the DP payable should be calculated on the basis of change of use from commercial to residential and not from utility to residential, goes the argument. The former scenario should result in a substantially lower DP.

Provisional approval has been granted to redevelop the Hillcrest property into 160 strata terrace houses with a 1.4 plot ratio, although market watchers suggest the successful bidder could instead apply to develop a five-storey condo with a 1.4 plot ratio.

Source : Business Times - 28 Mar 2006

THE en bloc fever is infectious - this time, the owners of the freehold Newton Meadows have caught it. Sources say the price expected is about $75 million, or about $680 per square foot of potential gross floor area inclusive of an estimated $6.9 million development charge.

Based on this, the breakeven cost for a new condo is about $900-$950 psf, say analysts. The 42,886 sq ft elevated site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area). The plot can be redeveloped into a 36-storey condo with about 95 units averaging 1,300 sq ft each.

Assuming the 10-storey Newton Meadows does fetch $75 million, owners of the existing 28 units stand to receive about $1.4 million to $3.5 million in proceeds, depending on the size of their units, which range from about 1,200 to 3,600 sq ft. The sums the owners will receive are roughly 60 per cent higher than what the apartments would have fetched if sold individually.

Jones Lang LaSalle is marketing Newton Meadows through an expressions of interest exercise that closes on April 27.

Source : Business Times - 28 Mar 2006

For some residents, there is more to home than just the windfall from a collective sale, even if that means blocking their neighbours’ bid to sell

THESE days, 72-year-old Madam Mavis Lee postpones her morning walk until her neighbours have left for work, so that she does not have to worry whether they will interrogate her, or just ignore her completely.

She is neither a criminal nor a bad neighbour, just one of several home owners in her Adam Road estate who rejected a collective sale proposal. And many of her neighbours are upset about it.

‘They used to smile and said ‘hello’ when we met, but now they just stare right through me. Sometimes, they would ask why I’m so stubborn and what’s the point of holding on. It’s very stressful,’ said Madam Lee.

With the promise of windfall sales sparking a new wave of ‘en bloc’ fever, stories like hers are being played out across the island.

Housewife Marie Tan, for example, loved her apartment in Bukit Timah so much that she wrote to The Straits Times Forum page earlier this month, lamenting that collective sale bids often create tension in her estate between those who agree to sell and those who do not.

Like Madam Lee, 35-year-old Madam Tan does not want to sell. She has lived in her freehold three-bedroom apartment with her husband and three children for eight years.

‘Those who wanted to sell have been civilised enough to not do anything negative to those who didn’t, but the whole community is split and there is a certain tension in the air,’ she said. ‘You belong either to the yes or no group. There’s a lot of second-guessing and awkwardness.’

In fact, all five home owners The Sunday Times spoke to asked for their estates not to be named to avoid bad blood with their neighbours.

For an entire development to be put up for collective sale, 80 per cent of home owners must agree. If the estate is less than 10 years old, that number is increased to 90 per cent.

It is not difficult to see why there has been a renewed surge in collective sale proposals in the past year, after a downturn in 2000.

Earlier this month, the freehold Eng Lok Mansion in Napier Road was sold en bloc and each of the 64 owners there will receive $2.16 million, about twice the market value.

Last weekend, Paterson Tower was sold for $266 million, with the owners of each apartment to receive $3.7 million.

Owners of apartments in collective sales typically pocket between 30 and 50 per cent more than what their properties are worth individually on the open market.

The buyers are usually developers, who tear down the existing properties and replace them with new estates with more units and communal facilities like swimming pools.

But to the five home owners interviewed, the notion of home is more important than the prospect of pocketing up to $900,000 for an apartment that may have cost $500,000.

Madam Tan said: ‘It is our first home after marriage, a place where I became wife and then mother to my three children. Their first steps and their first words all happened in this humble but cosy nest.’

Madam Lee, a widow, is afraid of having to start afresh. ‘I can’t imagine moving to a new estate at my age. I’ll have to find out things like where to buy groceries and what bus to take to visit my grandchildren,’ she said.

Said businessman H.C. Lim, 43, who lives in East Coast with his family of five: ‘My apartment is more than a home. It is from my late parents and it reminds me of their love.’

Sentimental ties play a big part in residents’ decisions to reject collective sales, said Mr Jeremy Lake, executive director, investment properties, at property consultant CB Richard Ellis. The property’s location and the fear of not being able to find a comparable home in the area are other important factors, he said. Of course, Mr Lim, Madam Tan and Madam Lee would have no choice but to move if 80 per cent of the owners agreed to the sale of their estates.

According to Mr Karamjit Singh, executive director of collective sale specialist Credo Real Estate, there are several grounds for objection - like if the process to sell the estate en bloc was not carried out according to guidelines or the collective sale proceeds were not enough to pay off existing housing loans - but sentimental attachment is not one of them.

For now, home owners opposing collective sales can only hope neighbours see beyond the dollars and cents of their property.

Said Madam Lee: ‘Part of a person’s identity is tied to the neighbourhood he lives in. How I wish the rest could see that.’

ngsls@sph.com.sg

‘It is our first home after marriage, a place where I became wife and then mother to my three children. Their first steps and their first words all happened in this humble but cosy nest.’ — HOUSEWIFE MARIE TAN on why her private apartment is not for sale

Source : Sunday Times - 26 Mar 2006

RIDING on the recent wave of collective sales, the owners of Beverly Mai have put their Tomlinson Road estate up for sale in the hope of raking in a cool $4.4 million each.

The freehold site was launched for public tender yesterday with a price tag of $238 million, or about $1,184 per sq ft per plot ratio (psf ppr) inclusive of a $16.8 million development charge.

At this price, the 76,888 sq ft plot is set to become Singapore’s second most expensive collective sale site.

Eng Lok Mansion at Napier Road was sold earlier this month at an all-time high of $1,218 psf ppr.

Beverly Mai is located opposite City Developments’ St Regis Residences, whose upcoming launch is expected to boast record-breaking prices of up to $2,600 psf.

Based on the last sale of a Beverly Mai unit at $2.5 million last August, each of the estate’s owners stands to gain a 60 per cent premium over what they would get if they had sold their units on the market.

About 85 per cent of the 52 owners have agreed to the collective sale, said the site’s marketing agent CB Richard Ellis in a statement yesterday.

A 36-storey project with 107 units averaging 2,000 sq ft each can be built on the site, which has a plot ratio of 2.8.

The tender for Beverly Mai will close on April 25.

Source : Straits Times - 23 Mar 2006

BEVERLY Mai, a 32-year-old residential development in Tomlinson Road, is up for collective en bloc sale by public tender. And the price tag: $238 million.

Jeremy Lake, executive director, investment properties at CB Richard Ellis, which is also the marketing consultants, pointed out that the site is across the street from the upcoming St Regis Residences.

He said that St Regis is expected to fetch close to $2,600 per square foot.

‘The upcoming launch of St Regis is creating a buzz in the area. That, coupled with a clear, unobstructed view of One Tree Hill, makes Beverly Mai an attractive site.’

At $238 million, the price of the site based on its plot ratio of 2.8 is $1,184 psf per plot ratio, inclusive of an estimated development charge of $16.8 million.

In August 2005, a unit was sold for $2.5 million. Before this, the highest price was $1.79 million in March 2004. If the asking price is achieved, owners of the 52-unit development stand to make up to a 60 per cent premium or $4.4 million per unit.

The 76,888 sq ft site can be developed up to 36-storeys and have up to 107 units if each is 2,000 sq ft. The breakeven price for the future development is expected to be $1,550 psf.

Also for sale, but in a vastly different price bracket, is Sunshine Regency. This new freehold development on Rambai Road in the East Coast, developed by Fragrance Homes, will be launched this weekend at an average $554 psf.

The marketing consultant is Real ONE International and it says a range of unit sizes from one to four bedrooms (452 sq ft to 603 sq ft) are being offered with the smallest unit starting at $361,000.

Source : Business Times - 23 Mar 2006