Pine Grove sticks to S$1.78 billion reserve price with mega en bloc attempt yet to move ahead

[SINGAPORE] Pine Grove’s collective sale committee (CSC) believes the estate’s S$1.78 billion reserve price is competitive despite some owners’ calls for an increase, as new additional buyer’s stamp duty (ABSD) concessions for large-scale en bloc redevelopments could improve the sale’s prospects and encourage more owners to back the exercise. 

As at Monday (Jul 27), 62 per cent of owners at the 660-unit condominium signed the collective sale agreement (CSA), below the 80 per cent mandate needed before the agreement lapses on Sep 20. 

The figure was disclosed in a CSC letter to owners on Monday, ahead of a townhall on Wednesday at the estate’s clubhouse that drew more than 30 residents, The Business Times understands.

In the letter, the CSC cited five reasons for owners’ reluctance to sign:

• Concerns that the reserve price may be too high to attract a buyer;
• Dissatisfaction with the reserve price;
• Disagreements over the methods of apportionment;
• Attachment to the estate; and
• Difficulties finding comparable replacement homes. 

The S$1.78 billion reserve price for Pine Grove’s latest attempt at a collective sale excludes any land betterment charge (LBC) that may be payable by the developer to redevelop the site. 

Marketing agent ERA indicated that including the estimated LBC for intensification, a lease top-up to a fresh 99-year tenure, and bonus gross floor area, the current asking price values the plot at about S$1,355 per square foot per plot ratio (psf ppr). 

The CSC argued that the S$1.78 billion figure remained competitive against government land sale (GLS) benchmarks set by nearby Pinetree Hill and Nava Grove.

The Pinetree Hill site was awarded in 2022 to UOL and SingLand for S$671.5 million, or S$1,318 psf ppr. The Nava Grove site was awarded in 2023 to MCL Land and Sinarmas Land for S$692.4 million, or S$1,223 psf ppr.

Pine Grove is a 660-unit condominium off Ulu Pandan Road that was privatised from a former Housing and Urban Development Company estate in 1996. It attempted a collective sale five times since 2008, but failed to secure sufficient owners’ support or attract a buyer. 

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The condo sits on a sprawling 893,219 sq ft parcel of land that ERA said can yield 2,050 new homes if redeveloped, subject to the relevant authorities’ approval.

The CSC’s appeal came a day before National Development Minister Chee Hong Tat unveiled fresh concessions for en bloc redevelopments, to encourage the reuse of land.  

The ABSD regime has been revised for developers taking on large-scale en bloc redevelopments, applying to qualifying sites purchased on or after Wednesday.

Mega en bloc sites yielding at least 1,400 residential units will now have seven years to complete construction and sell all units, up from 5.5 years previously. Developers must sell at least half the units within six years, or risk a clawback, with interest, of the 35 per cent upfront ABSD remission component.

Large sites that yield at least 700 but fewer than 1,400 residential units will get six years. Developers of large and mega projects that meet additional criteria will also be eligible for a further six-month extension. Both categories must achieve a redevelopment yield of at least 1.5 times the existing number of residential units. 

ERA told BT that the announcement was “creating a more supportive environment for large-scale collective-sale projects”, and could boost owners’ confidence to obtain the mandate.

This offers “the site a renewed chance to be brought to market within the updated policy framework”. 

ERA declined to comment on whether any developers had approached it about Pine Grove at its lower reserve price, adding that developer interest would depend on a site’s sale readiness, market conditions and investment goals at the time.

Nicholas Mak, chief research officer at Mogul.sg, said the steady supply of GLS residential land is posing competition to en bloc sale projects, as developers may choose to acquire land through the GLS process instead.

“Developers may favour GLS sites as the process is shorter and carries lower risks of owners’ objections and litigation. One of the main reasons property owners resist en bloc sales is that they may only be able to buy replacement units that are smaller than their existing homes,” he added. 

The CSC has pointed to rising maintenance costs at the ageing estate as a reason for owners to support the collective sale. 

It said monthly Management Corporation Strata Title (MCST) fees will increase to S$479.60 per unit from August, from S$318.28 previously, with the 42-year-old condominium expected to require more repairs over time. More frequent spalling concrete and water seepage, among other maintenance issues, will further strain the estate’s sinking fund.

The CSC also noted that there were no competing GLS sites in the vicinity during the current collective sale attempt, though it warned that development of the nearby Maju area could bring stronger competition in future bids.

If the sale fails, it estimated that values of larger units could fall to between S$1.6 million and S$1.8 million.

A former resident, known as Tan, who sold his unit a few years ago said repeated collective sale attempts had led to uncertainty among residents.

“The sale price is one thing, but the living condition is another,” he said, citing the estate’s unsheltered drop-off point, ageing lift lobbies and dated lighting. He added that after each unsuccessful en bloc attempt, some owners would decide to sell their units. 

The CSC’s latest effort to reach the 80 per cent mandate follows earlier friction over the appointment of ERA and law firm BR Law, which a group of owners said should have been put out to tender, according to media reports.