Tough call for developers thinking of walking away from en bloc sale

SINCE the latest property cooling measures took effect on July 6, at least two developers have called off their purchases of residential collective sale sites.

In late July, Tee Land announced that it had decided against exercising its option to purchase Teck Guan Ville in Upper East Coast for S$60 million. It would forfeit its one per cent deposit; Tee Land had signed the 'option to purchase' agreement in late June.

Earlier this month, Lafe Corporation said it would not be completing the S$57 million acquisition of Fairhaven, a 15-unit development in Sophia Road; it had entered into the deal in March. Lafe said the S$5.7 million in total deposits will be forfeited to the vendors. The group expects to recognise a loss of about S$8.5 million in the current quarter - arising solely from not completing the acquisition and related transaction expenses and taxes (including S$2.3 million in stamp duties already paid on the contract).