Asking price raised a month before expiry of sales agreement, in bid to get 80% mandate
Mega site Mandarin Gardens has raised its asking price to a new record of $2.927 billion, just one month before its collective sales agreement (CSA) is set to expire, in a bid to get the 80 per cent mandate to launch a tender.
If the collective sale goes through, it would be the biggest transaction in dollar terms struck here.
But the tactic does not appear to have worked so far, with signatures at just 67 per cent as of yesterday, compared with 64 per cent before the price was raised a second time.
The 1,017-unit leasehold condo first raised its asking price to $2.788 billion in November last year from $2.479 billion after owners discovered that the land parcel was undervalued.
In a letter to owners on Feb 21, the site’s collective sale committee (CSC) said it raised the reserve price by 5 per cent and adjusted total land cost to the developer to $1,250 per square foot per plot ratio from $1,191 “to better help achieve the 80 per cent consensus required”.
“As the validity of the CSA ends on March 24, 2019, we appeal to all (owners) who are still considering, to make an immediate decision to sign the CSA,” the CSC said.
“If the 80 per cent consensus is not achieved by March 24, the whole en bloc sales process will come to a halt… However if we achieve the 80 per cent, we are given a 12-month period to find a developer/buyer for our land,” it added.
Under the new reserve price, owners of the smallest unit (732 sq ft) can stand to get $1.86 million, while owners of the largest unit at 3,800 sq ft can get $5.98 million. Those owning 1,500 sq ft to 2,000 sq ft units can get between $3.016 million and $3.5 million.
But prospects for mega sites do not look bright, as many developers are expected to give such sites a miss due to higher land acquisition costs after the cooling measures.
Already, a number of projects have closed their tenders without a bid recently, including Grange Heights in District 9. It has entered into private treaty negotiation, said Ms Tang Wei Leng, managing director of Colliers International, which is marketing the project.
Spanish Village in District 10, which was in the process of lowering its reserve price to $828 million from $882 million, closed its tender on March 11, while Golden Mile Complex closed its tender on its $800 million collective sale on Jan 30. Marketing agent Edmund Tie & Company did not respond to queries for tender results on both projects.
Another mega site, Dairy Farm estate, has also raised its reserve price from $1.688 billion to $1.84 billion to get the 80 per cent consensus before its CSA expires on April 6. As of March 9, 71 per cent have signed.
Meanwhile, Katong Plaza relaunched for sale on March 7 at the same asking price of $188 million after getting approval from the Urban Redevelopment Authority on Feb 27 to convert its site to hotel use – a sector that is gaining traction as interest in residential sites wanes.
“Source:[Mandarin Gardens seeks record $2.927b] © Singapore Press Holdings Limited. Permission required for reproduction”
