SINGAPORE – Pine Grove condominium will be relaunched for collective sale at $1.95 billion on March 6 after its collective sale committee (CSC) failed to get the 80 per cent mandate to lower the reserve price to $1.78 billion.
The tender closes on May 6, 2024, at 3pm.
Efforts are still under way to get the mandate for the lower reserve price by the close of tender, marketing agent ERA Realty Network’s managing director of investment sales, Mr Tay Liam Hiap, told The Straits Times.
As at March 3, over 62 per cent of home owners at Pine Grove, which has a remaining lease term of 59 years, have consented to the lower reserve price.
ST understands there were enquiries from a few developers as at February after more than 60 per cent of the 660-unit condominium’s owners signed a supplemental agreement to lower the reserve price to $1.78 billion.
At $1.78 billion, the land rate works out to $1,341 per sq ft per plot ratio (psf ppr).
This is after factoring in the 10 per cent bonus gross floor area, an estimated land betterment charge (LBC) of $987 million for intensification and a lease upgrade to a fresh 99-year one.
Developers pay an LBC for the right to enhance the use of some sites or to build bigger projects on them. LBC rates remained unchanged in the latest round of rate revision on March 1.
Pine Grove’s home owners began signing the supplemental agreement at an extraordinary general meeting held on Jan 21. A Jan 18 letter from ERA Realty to owners said the $1.78 billion price was found to be a “fair valuation” by Premas, a unit of Cushman & Wakefield.
This assessment includes the full potential of redeveloping the 893,218 sq ft site into a 2,050-unit development.
At $1.95 billion, the land rate works out to $1,440 psf ppr. This is after factoring in an additional 10 per cent bonus gross floor area under the various incentive schemes and an estimated LBC of $1.02 billion for intensification and a lease upgrade to a fresh 99-year lease.
ERA chief executive Marcus Chu noted that the support of those who signed the supplemental agreement indicates owners’ strong readiness to sell their units through this collective sale attempt.
“The recently revised additional buyer’s stamp duty (ABSD) remission clawback for residential projects is also a positive development for large collective sale sites like Pine Grove.”
Currently, developers buying land on or after Dec 16, 2021, have to pay 35 per cent ABSD that may be remitted upfront, subject to conditions, plus 5 per cent ABSD that is non-remittable.
If the developer fails to sell its residential units within five years from the date of buying the land, the 35 per cent remittable component will be clawed back with interest, regardless of the number of unsold units.
With effect from Feb 16, 2024, projects with at least 90 per cent of units sold at the five-year sale timeline will be subject to a lower ABSD remission clawback rate.
In the wake of these policy adjustments, more residential projects are again trying their luck at a collective sale, albeit at lower prices. Thomson View condominium was put up for collective sale in late February at a lower reserve price of $918 million after unsuccessful attempts in 2022 and 2021 at $950 million.
Thomson View’s marketing agent, Edmund Tie, said the site could be redeveloped into a project with 1,240 residential units based on an average apartment size of 85 sq m.
Freehold condominium Island View in Pasir Panjang was relaunched for sale on March 5 at $575 million, but 60 per cent of owners have given their consent to lower the reserve price to $532 million in view of softer market conditions, according to marketing agent PropNex Realty. The condo’s CSC is now collecting signatures to get an 80 per cent mandate for the lower price.
