Changi Garden latest to hop on en bloc train
Singapore
ANOTHER en bloc aspirant has joined the hopefuls. The residents of Changi Garden have agreed to put up their nearly 40-year-old property for collective sale by public tender on Thursday. Their asking price is S$196 million, which translates to about S$700 per square foot per plot ratio.
Going by this amount, an apartment owner will receive S$1.69 million to S$1.79 million. Penthouse owners will receive S$3.18 million to S$3.74 million, and shop owners S$3.7 million to S$5.5 million.
This is the 15th residential en bloc attempt this year; 50 to 60 deals are said to be under way at various stages, which Jennifer Chia, head of corporate real estate at TSMP Law, thinks is a momentum that can be sustained only for developments with attractive pricing, redevelopment potential and locations.
"Since the last en bloc fever (from 2005 to 2007), we have seen the additional buyer's stamp duty and additional conveyance duties imposed," she said.
"Some of the developers that took part in the last cycle actually took their money overseas, so it may not be so easy for them to bring that money back to Singapore quickly."
Changi Garden was developed around the late 1970s and early 1980s, and comprises 60 apartments, 12 penthouses and 12 shops. Located at the junction of Upper Changi Road North and Jalan Mariam, the freehold property sits on 200,093 sq ft of elevated ground and is surrounded by houses.
According to the Urban Redevelopment Authority's Master Plan 2014, it is zoned "residential" with a plot ratio of 1.4. Due to the high development baseline, no development charge (DC) is payable, said Edmund Tie & Company (ET&Co), the property consultant for the collective sale.
DC is a tax payable to the state as a result of the state approving a development proposal that will increase the land value of a site, for instance, when it increases the intensity or plot ratio.
ET&Co noted that the Changi area is slated for transformation into a major employment centre, with an ongoing agglomeration of business establishments in the industrial and commercial cluster, including Changi Business Park, Changi North and South Industrial Estates, Loyang Industrial Estate, Singapore Expo and others.
"This trend is anticipated to continue given the area's proximity to Changi Airport and the Singapore University of Technology and Design. The upcoming Jewel Changi Airport and Terminal 4 will serve to further enhance the attractiveness of the location," it said. Tan Chun Ming, ET&Co's director of investment advisory, said: "Since 2013, there has not been any residential land sold within a 2.8-km radius of Changi Garden. We believe a developer can take advantage of this huge freehold site to create a residential development with full communal and lifestyle facilities."
Nicholas Mak, ZACD Group executive director, said the property can be redeveloped into a low-rise condominium with about 280 to 300 units in the relatively quiet neighbourhood.
"Following the recent increase in residential DC rates, the en bloc sale projects with very high DC baselines, resulting in little or no DC payable for redevelopment, would enjoy an advantage over other competing en bloc sale projects."
The tender exercise for the site will close on Oct 16 at 3pm.
Commenting on the en bloc market at large, Ms Chia from TSMP said: "With so many deals in the pipeline to choose from, developers can afford to be a bit more picky as to what they think would be a good redevelopment opportunity.
"It looks more like a buyer's market now than a seller's market. Developers are looking at the deals, but they are also cautious and crunching their numbers."
To be sure, not every owner is anxious to sell. Thomas Tan, a resident at Sutton Place in Farrer Road, said: "We are in no hurry to monetise our property or chase any windfall. We just think it will be too long to wait until the next cycle."
The sales committee at Sutton Place is currently preparing to hold an extraordinary general meeting to obtain approval for its collective sales agreement and apportionment method.
This is its second attempt, after a previous attempt five years ago failed to garner the requisite 80-per-cent consensus among residents.
