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SINGAPORE : Former HUDC estate Farrer Court has been launched for en bloc sale, with an asking price of $1.5 billion.
At that price, this will make it the largest collective sale on record, far surpassing the $835 million for neighbouring Leedon Heights last month.
Property consultants say the recent spate of record-setting en bloc deals has prompted owners to raise asking prices by as much as 30%.
If successful, the 618-unit Farrer Court condominium will also set a record for the most number of units and the largest land area (838,488 square feet) to be sold in a collective sale.
The 99-year leasehold privatised HUDC complex near Holland Road has a remaining lease of 69 years.
According to consultants to the sellers Credo Real Estate, the site has the potential for 1,800 units of apartments sized about 1,250 square feet, to be housed in 36-storey blocks.
"We're hoping to achieve about $1.5 billion. We believe it's possible as $1.5 billion works out to be about $850 per square foot per plot ratio, that's the land rate. Leedon Heights was sold for $1,062 psf. Because Leedon Heights is freehold and this (Farrer Court) is leasehold, we feel that the $200 psf disparity is justifiable," says Karamjit Singh, MD of Credo Real Estate.
Due to the large number of units involved, the Farrer Court sales committee had to raise its original selling price before it could convince 80% of owners to sign up for the sale.
At $1.5 billion, owners could pocket some $2.4 million each.
"We managed to chalk up the first 50% to 60% very quickly. Thereafter the process of collecting signatures slowed down. Fortunately the market moved up significantly in the midst of this. That allowed the sales committee to up the reserve price substantially, and motivated quite a lot of the remaining owners to come forward to sign," says Credo's MD.
Market watchers say there is now a trend of owners raising their prices in potential en bloc deals, amid a booming property market.
Estates raising their asking prices include Pine Grove and Clementi Park.
"Common trend is an understatement. Actually for all the estates that we're currently doing, there is a provision for owners to raise the reserve price during the process of collective sale, to bring themselves up to market level. So there is a constant review of the reserve price," says Lim Song Hai, National Director of Investments at Jones Lang LaSalle.
"For the first quarter of 2007, we've seen a rise of reserve prices in the region of about 30% on average."
Private home prices here rose some 10% last year, and another 5% in the first three months of this year. - CNA /ls
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