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Smaller plots still in en bloc game

They have more digestible prices and carry lower risks, analysts say

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Casa Sophia, a 12-unit development off Orchard Road, has a reserve price of S$36 million. If a sale is successful at that price, each owner could receive between S$2.69 million and S$3.4 million.

Singapore

PROPERTY owners sitting on smallish plots of land are still hopeful of pulling off en bloc deals despite recent cooling measures, which are seen to hit large residential sites hardest.

Owners at the freehold, 12-unit development Casa Sophia are putting up their Mount Sophia homes for a reserve price of S$36 million.

If a sale is successful at that price, each owner could receive between S$2.69 million and S$3.4 million.

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The development, which is located near Orchard Road, sits on 12,328 sq ft of land.

Based on the reserve price, the land rate translates to an estimated S$1,390 per square foot per plot ratio (psf ppr), excluding development charge.

Under the Urban Redevelopment Authority's Master Plan 2014, the site is zoned "residential" with a gross plot ratio of 2.1. It could be rebuilt into an estimated 34 units, based on a 753 sq ft per unit size.

The tender for the site will close on Aug 14 at 3pm.

Tjhai Citanegara, a representative from marketing agent ERA Realty, said that he was very confident that the site will land a buyer.

"It's a smaller site, so the asking price is lower compared to the other multi-million-dollar asking prices on the market," he said.

The 24-unit Haig Road Flats is also on the market starting July 12. CS Chong of marketing agent Century 21 said that the expected market price is between between S$51 and S$52 million - netting each owner S$2.1 to S$2.2 million.

Development charge and related costs of about S$2.87 million could be levied, he said. Either way, the land rate translates to just north of S$1,300 psf ppr.

The four-storey walk-up on Haig Road with a 999-year lease is located close by the upcoming Marine Parade MRT.

It has a site area of 27,389 sq ft and is zoned residential with a gross plot ratio of 1.4. It can be developed up to five storeys high with 35 units.

Mr Chong said that he believes that the latest cooling measures will not affect the site. "There is no heavy holding cost, and we expect it to move fairly fast," he said.

The tender will close on Aug 7 at 4 pm.

Near Kovan MRT, the freehold Fortune Park will also be launched on Thursday with a S$126 million asking price, which translates to a land rate of S$1,337 psf ppr.

Over 80 per cent of owners have agreed to the collective sale of the 44,878 sq ft site which is is zoned for residential use with an allowable gross plot ratio of 2.1.

It can yield approximately 94,243 sq ft of gross floor area upon redevelopment. No development charge is payable due to the high baseline for the land, and the new development could yield about 100 to 120 units.

"As the price quantum is palatable to developers, and the Kovan area has a limited supply of new units, Fortune Park presents a low-risk acquisition to developers and should attract a healthy number of bidders despite the government's new cooling measures," said Angela Lim, deputy head of investment sales, Huttons Asia.

The tender for Fortune Park closes on Aug 17 at 2 pm.

The stream of en bloc hopefuls comes amid new additional buyer's stamp duty (ABSD) measures on that were effective from July 6.

Developers are now subject to a new, non-remissible 5 per cent ABSD when they buy residential development sites.

On top of that, the remissible ABSD for residential developers which used to be 15 per cent has been jacked up to 25 per cent.

This means that if a developer fails to complete the residential project as well as sell all its units within five years of acquiring the site, it will have to cough up the 25 per cent ABSD with interest.

Lee Nai Jia, senior director and head of research at Knight Frank, said that while the smaller sites command a lower quantum and are less risky, they also incur higher unit costs of construction.

"The margins, which will be much lower than the larger sites, will be less attractive to some developers," he said. "Hence, developers are still attracted to larger sites if the average pricing meets their requirements."

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