People’s Park Centre owners to vote on collective sale bid

People’s Park Centre has 120 apartments, 256 offices, 324 shops and a carpark. Mr Philip Ng, director of Savills Singapore, its marketing agent, says it was built as a mixed-use development, but the land is zoned commercial. So the developer can build a fully commercial building.ST PHOTO: WONG KWAI CHOW

They will decide whether to accept $1.3b reserve price at meeting on Oct 23

People’s Park Centre owners will be voting on whether to accept a reserve price of $1.3 billion, which analysts say is the highest so far for a mixed-use collective sale in this cycle.

At an extraordinary general meeting (EOGM) on Oct 23, they will decide whether to accept the reserve price and method of apportionment for their first collective sale attempt. The development, which has 120 apartments, 256 offices, 324 shops and a carpark, has 51 years left on its lease.

“Once we are able to secure a 50 per cent vote or a simple majority, we can start collecting signatures for the 80 per cent mandate the same day,” said Mr Philip Ng, director of Savills Singapore, its marketing agent. The reserve price represents a 41 per cent premium over valuation, he added.

Even so it may be a rocky road ahead, say some observers. Some owners are asking for the reserve price to be adjusted higher, while others are disputing the method of apportionment.

“The clock is ticking as the lease runs down,” collective sale committee spokesman Lee Chin Chee said.

“If we don’t go this cycle, with the lease running low, we will most likely get a lower price than what we are asking now, as top-up fees… will be higher by the next cycle.”

Apartment owners each stand to get between $1.83 million and $4.07 million; office owners, between $419,000 and $3.129 million; and shop owners, from $139,000 to $15.9 million.

The owner of the carpark stands to get $55 million, said Mr Lee, citing the collective sale agreement he received yesterday.

“There will be fireworks at the EOGM,” he said. “Owners who want more circulated letters last week to air their dissatisfaction.”

But there are also others who are content with their potential payouts. One of them is Mr Stanley Kwok, the owner of Chung Kiu Medicine, who took over the traditional Chinese medicine business from his uncle, who had bought the unit in 1980 for about $300,000.

Asked why he supports the sale, he said: “Why not? Many owners here are in their 60s and 70s and want to retire soon, so we hope that we can move faster and get the sale done this cycle, in order to get a better price.”

He can expect to gain more than $2 million if the sale is successful, and hopes to retire in two years.

Built in 1970, People’s Park Centre sits on a 96,000 sq ft site, with a gross floor area of about 820,000 sq ft. It is zoned commercial under the current masterplan.

Analysts believe the commercial sector now looks appealing to developers and investors as it is unaffected by July’s cooling measures, which have taken a toll on residential properties. Foreigners also do not have to pay additional buyer’s stamp duty on commercial properties, and the loan-to-value limits also remain unchanged.

According to a quarterly report by Colliers International, mixed-use properties remained popular, with investment sales for the segment rising 30.2 per cent to $1.5 billion. This comprised mainly the public land sale of a commercial and residential site in Holland Road for $1.2 billion, and the private investment sale of Chinatown Plaza for $260 million.

But there is a growing list of commercial buildings whose collective sale tenders have closed this year but remain unsold. They include Jalan Besar Plaza and Verdun House.

“People’s Park Centre was built as a mixed-use development, but the land is zoned commercial. So that means the developer can build a 100 per cent commercial building,” Mr Ng said.

“If the developer wishes to add a residential component, they have to submit a planning permission application to the authorities to determine if that is allowed. In addition, the Singapore Land Authority will look at granting a lease topping up only when the developer has planning permission from the URA (Urban Redevelopment Authority) for what it plans to build,” he added.

“Source:[People’s Park Centre owners to vote on collective sale bid] © Singapore Press Holdings Limited. Permission required for reproduction”

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