The collective sale committee (CSC) of Pine Grove has raised its reserve price to $1.86 billion from $1.72 billion in a last-minute bid to secure the 80 per cent mandate to launch a public tender, even as developers turned cautious after the recent cooling measures.
The move came after “pressure and petitions from a small group of owners who feel Pine Grove ought to be marketed at a higher reserve price”, and it was against the advice of marketing agent Huttons Asia, said the company’s head of investment sales Terence Lian.
Huttons resigned last Wednesday after the CSC’s “unilateral” move. “It’s a painful decision and not the outcome we wanted… We have no choice but to step down,” Mr Lian said on Friday.
Pine Grove must get the 80 per cent mandate by Oct 28 or its collective sale attempt will be deemed to have failed. Mr Lian said to date, 78 per cent of owners have consented to the $1.72 billion price, but the last 2 per cent are holding out for the higher $1.86 billion price.
When asked yesterday, the CSC declined to comment.
In an Oct 11 letter to Pine Grove owners seen by The Sunday Times, Huttons said it had explained on several occasions that the $1.72 billion price was based on the residual land value method and market sentiment. It had also explained the importance of setting a realistic price, and that the owners will be safeguarded by an independent valuation report at the close of tender.
It added that since January, more than 50 sites have closed tender without being able to find a buyer. Of these, more than 25 sites had tender-closing dates after the cooling measures took effect on July 6.
In the letter, Huttons also revealed that on Sept 25, several owners had met a rival agent who claimed that a “$1.86 billion RP (reserve price) is doable” and they are “engaged with certain foreign developers” who have “a budget of $2 billion and beyond”.
The rival agent also suggested a “clean-cut voluntary resignation of Huttons by Oct 10” so that another agency may effectively take over, the letter said.
The CSC and Huttons have asked the owners who requested the $1.86 billion price to provide a written “expression of interest from a buyer who is committed to bid for Pine Grove at not less than $1.86b as claimed by one owner” to justify their claim. But so far, they have not received any, the letter said.
In an Oct 5 open letter, the CSC pointed out that in the last collective-sale bid in 2011, the committee at the time had been under pressure from owners to raise the reserve price to $1.7 billion, even though the independent valuation report valued Pine Grove at $1.25 billion on close of tender. “This resulted in a failed attempt,” the CSC said.
The 660-unit mega site near Ulu Pandan Road is the first to raise its reserve price after the cooling measures, even as sites such as Windy Heights lowered their price and Faber Garden kept its price unchanged. Ivory Heights and Thomson View have had their collective sale deals lapse after failing to get the mandate by their deadlines.
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