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Bids for Florence Regency come below independent valuation

FLORENCE Regency, a privatised HUDC estate in Hougang, received three bids at the close of its public tender.

But the collective sales committee was not able to award the tender to the top bidder as the bid price, while above the reserve price of S$600 million, was below valuation, BT understands.

A valuation report was submitted by independent valuer Colliers International that valued the estate at S$629 million. As a result, the valuation became the new minimum price for Florence Regency, based on the terms of the collective sales agreement (CSA).

In a letter to owners on Thursday, JLL said it is going back to all interested parties to consider an offer at or above the new minimum price.

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The laws governing collective sales allow for a private treaty to be concluded within 10 weeks from the close of the public tender. The tender for Florence Regency had closed on Wednesday.

Built in the late 1980s, the 336-unit estate is zoned residential with a gross plot ratio of 2.8 under URA's Master Plan 2014.

With a balance lease term of some 71 years, the 389,236 square foot site could potentially support a total gross floor area of over 1.1 million sq ft or an estimated 1,100 to 1,300 apartment units.

The estimated differential premiums for the lease top-up and increased built-up of the site would be about S$288.5 million.

This would translate to a total land cost of S$842 per square foot per plot ratio (psf ppr) for the developer, which is below the S$860 psf ppr that an Oxley Holdings-led consortium paid for Serangoon Ville, and the S$965 psf ppr that Keppel Land and Wing Tai paid for the government land site along Serangoon North Avenue 1.

Florence Regency is near Hougang MRT Station, which will become an interchange station when the planned Cross Island Line is completed, and the bus interchange with Hougang Mall.

It is also within walking distance of Kovan MRT Station along Upper Serangoon Road, where there is a wide range of F&B options.

The en bloc fever in Singapore has just started with nine sites sold for S$3.7 billion, including one industrial site, leading market watchers to believe that the en bloc upcycle is still at a nascent stage and the property market is in an early stage of recovery.