En bloc hopeful Chuan Park gets offer of S$860m, lower than reserve price

EN BLOC hopeful Chuan Park, which is currently in a private treaty period after the tender for its collective sale closed on Apr 26, has received an expression of interest (EOI) from a developer for S$860 million, below its reserve price of S$938 million.

According to a circular issued to owners by marketing agent ERA Realty, which was seen by The Business Times (BT), the Collective Sale Committee (CSC) now requires an 80 per cent mandate from owners of the 99-year-leasehold condominium by Jun 26 so as to enter into negotiations with the developer and hammer out the terms of the sale and purchase (S&P) agreement. At S$860 million, this is estimated to work out in the region of S$1,170 per square foot per plot ratio (psf ppr).

When contacted by BT, ERA declined to comment on how many owners have signed the supplemental joint agreement so far. The deadline for the CSC to sign an S&P is Jul 5.

Based on the EOI offer price of S$860 million, owners of residential units could stand to receive sales proceeds ranging from S$1.11 million to about S$2.45 million. Owners of a 474 square foot (sq ft) commercial unit and a 1,238 sq ft commercial unit could receive about S$1.05 million and S$1.94 million respectively.

The collective sale tender was launched on Mar 14 and closed on Apr 26. Prior to that, it was last put up for tender from Oct 5 to Nov 18, 2021, just before the government introduced fresh cooling measures in December. Chuan Park also took a shot at a collective sale in 2018 with an asking price of S$900 million — revised upwards from an initial S$790 million — but did not secure the necessary 80 per cent consent from owners at the time.

At S$938 million, the land rate, which includes an upgrading premium of S$192.62 million, works out to S$1,256 psf ppr, ERA had said previously. The development change is not payable due to the existing high baseline. The 400,588.72 sq ft site has a gross plot ratio of 2.1 under the Urban Redevelopment Authority’s Master Plan 2019 and an achievable proposed gross floor area of 841,236.3 sq ft. Subject to the necessary approvals, ERA estimates that it can be redeveloped into 900 units. It currently comprises 444 residential units and 2 commercial units.

Deal momentum has slowed in the collective sale market since December’s cooling measures as developers take a more cautious stance, although attractive sites with palatable prices continue to pique developers’ interest amid dwindling unsold stock. Wing Tai Holdings last month bagged Lakeside Apartments in Jurong for S$273.9 million, topping the S$240 million reserve price.

Another much bigger Jurong development, Lakepoint Condominium, closed a collective sale tender on Jun 8 with no bids received. The reserve price for the site was tagged at S$640 million, with development charges and lease top-up premium bringing the total quantum a buyer would have to fork out to around S$800 million.

The 99-year-leasehold Lakepoint Condominium is now in private treaty negotiations with interested parties, said marketing agency PropNex Realty. A previous tender for the site had also closed without a bid on Dec 22, 2021.

On Monday, ERA announced that 160-unit Park View Mansions — located close to Lakeside Apartments — is being put up for collective sale at a price tag of S$260 million, which translates to a land rate of about S$1,023 psf ppr. The price includes the estimated differential premium for the increase in intensity to the development plot ratio of 2.1 and to top up the lease to a fresh 99 years. The tender will close on Jul 27.

Built in the 1970s, the project at Yuan Ching Road in District 22 sits on a land site of about 191,974 sq ft and is zoned for residential use with a gross plot ratio of 2.1 under the Master Plan 2019. Subject to the necessary approvals, it can be redeveloped up to a gross floor area of 403,145 sq ft, according to ERA.

“We expect strong market demand for the new project at the Park View Mansions site, given its location and rare land shape which commands unblocked views of Jurong Lake Gardens, Lakeside Garden and Jurong Lake,” said Jeremy Rikas Chiu, group division director at ERA. “The future development can potentially be rebuilt into an upscale 20 to 24 storey condominium project of over 440 units, assuming an average apartment size of 915 sq ft.”

Park View Mansions also attempted an en bloc sale in 2018, first at a reserve price of S$320 million, before later lowering its asking price to S$250 million.