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Lum Chang snags first en bloc site this year for S$65m
The price translates to a land rate of S$1,664 per square foot (psf), based on the site area of 3,629.1 sq m (39,063 sq ft).
The option to purchase all 13 strata units and common areas in the residential property was exercised on Friday by Lum Chang Auriga Pte Ltd, a wholly owned subsidiary of the group. The transaction is subject to approval by the Strata Titles Board.
Owners at One Tree Hill Gardens are expected to receive between S$4.3 million and S$9.1 million in gross sale proceeds.
Lum Chang Holdings non-executive director Kelvin Lum, a son of Lum Chang managing director David Lum, said the group is planning to build "bespoke landed homes to suit the needs and tastes of individual buyers".
The freehold site is expected to accommodate up to 15 landed units, with the launch date likely to be next year.
The purchase price is below the owners' asking price of S$72.8 million, but marketing agent Knight Frank's head of investment and capital markets Ian Loh said the psf pricing on land area is comparable to those in recent transactions of landed homes in the vicinity.
But because the developer's offered price is lower than the confidential reserve price, owners had to go through another round of garnering the requisite 80 per cent consensus.
"While developers are seeking to replenish their land bank, they are expected to be price sensitive and selective about sites," Mr Loh said.
The plot of land now houses six maisonettes and seven apartments. Under the 2014 Master Plan, it is zoned residential for two-storey semi-detached houses. Located at the junction of One Tree Hill and Jalan Arnap, the site is 300 m from the upcoming Orchard Boulevard MRT station on the Thomson-East Coast Line.
Mr Lum said: "Landed homes in the area are hard to come by, so we think there is a market for this landed housing. We think it's a good opportunity to be active in development in Singapore."
Lum Chang's last residential development projects here were two executive condominium projects which it jointly developed with Frasers Centrepoint Limited, namely, Twin Fountains (launched in 2013) and Esparina Residences (2010). Lum Chang had minority stakes in both.
The collective sales market has turned around from the doldrums of 2014-2015, stirred to life by the 2016 success of three residential en bloc deals worth more than S$1 billion.
More property owners are thus embarking on the collective sale process this year. Owners at Lagoon View, a leasehold project in Marine Parade with a land size of over 500,000 sq ft, have set up a sales committee and are looking to engage consultants. The current plot ratio of the 480-unit project is 1.9, below the maximum plot ratio of 2.8.
Projects farther along in the pipeline for en bloc sale include the 12-unit, freehold Dunearn Court, which is said to be close to garnering an 80 per cent consensus from its owners. Amber Park in Katong is said to be at the halfway mark of the requisite consensus level; progress is being made in Cairnhill Mansion in District 9, Villa D'este in District 10 and Florence Regency (a former HUDC estate in Hougang Avenue 2).
The tender for Rio Casa, a former HUDC estate in Hougang with a 36,811.1 sq m area, closes on May 23. Owners are expecting offers of more than S$450.8 million.
CBRE director for investment properties Galven Tan said developers are generally hungrier now and thus more willing to compete for sites with good attributes "based on their views of what the right market value is".
JLL regional director for capital markets Tan Hong Boon noted that owners' pricing has to be reasonable to attract competitive bids from developers and to secure the best price. If owners are asking for higher prices, it may take longer for them to conclude a sale, he said.