Enbloc News: No takers for Pacific Mansion & Pearl Bank Apartments

The close of the tender for Pacific Mansion yesterday marked yet another collective sale ending with no firm offers in sight.

The Straits Times understands that the owners of Pacific Mansion’s 288 residential units and two commercial units will now be discussing options with interested parties.

The River Valley Close development was put up for sale last month with an indicative price for $990 million, or $2,008psf ppr – the second attempt at a collective sale.

In 2007, the owners had asked for $1.18 billion, or about $2,400psf ppr, in a high-profile collective sale that failed to attract bids matching the asking price from developers.

Pearl Bank Apartments in Outram, whose tender closed on Nov 3, has also found no takers.

The owners were asking for $725 million or $1,445psf ppr – lower than then $750 million it had asked for previously.

It is the fourth time the 99-year leasehold development has been put up for sale. Sources say it is not clear if the owners will be keen to take another stab at a collective sale.

Several developments put up for collective sale recently have reduced their initial asking prices.

Dunearn Gardens in Newton is now going for bids between $550 million and $561 million, a dip from its 2007 guide price of $578.5 million.

Mega collective-sale site Laguna Park in the east also lowered its reserve price from $1.33 billion set in May to $1.25 million.

Several other big collective-sale sites, such as Pine Grove, Tulip Garden and Hawaii Tower, have also failed to find buyers.

Such “mega sites” carry hefty price tags that sometimes surpass the billion-dollar mark, and often span a huge land area – two factors analysts say exclude all but a limited number of deep-pocketed developers.

“Forking out such a huge amount often means that developers will have to make sure they have enough cash, but they also have to find a bank that’s willing to help them finance that huge sum,” said Ku Swee Yong, chief executive of International Property Advisor.

He added that it is a big risk not many property players are willing to take, given the jittery economic climate.

“Development charges and sums to top up the lease have to be factored in as well. All these arrangements have to be made and there is a chance the Strata Titles Boards might not approve the sale in the end.”

The readily available supply of Government Land Sale (GLS) sites has also taken the shine off collective-sale properties.

Compared with such properties, buying a GLS site is a less complicated process, said Mr Alan Cheong, Savills’ research and consultancy associate director.

“Bidding for a GLS site means you compete with other developers, but with collective sales, you’re up against other developers and the owners of the property.”

Owners often cite the freehold status or prime location as desirable attributes of their properties.

But analysts point out that demand for properties in central locations such as District 9, 10 and 11 is weaker now, with most of the price growth in the current market led by mass-market segment, making collective sale projects in prime areas an even less attractive investment.

However, market experts said the smaller sites could still see interest, possibly from niche players and those new to the property development sector.

Source: The Straits Times

So two more (collective sales) bite the dust… again. Some may say that hindsight is always 20/20, but if you have followed our previous posts on the recent collective sales, you will appreciate why the wife and I are not a tad surprise by the outcomes of Pacific Mansion and Pearl Bank Apartments.


Given the current poor economic climate, one wonders why owners of developments that are asking for $200 million or more are still pushing their estates out for collective sales. The developers are certainly no fools, and unless one is a sucker for punishment, such en bloc attempts at this juncture are just setting themselves up for failure and disappointment.


Then again, the wife and I are no experts while these collective sales are managed by professional property marketers. So they should know better…

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Enbloc news #1: Pearl Bank on the market again, for $725m

Pearl Bank Apartments near Chinatown is back on the market again – this time at a lower price.

The owners have followed the lead of some other collective sale projects by trimming their expectations.

They are now hoping for $725 million.

The 280-unit project had an estimated price of $750 million when it was launched for sale in March this year.

A number of projects mounting collective sales have cut their asking prices in a bid to close their deals in the light of global market uncertainties.

The new price works out to $1,314psf ppr, including a lease top-up of about $162 million and a 10% balcony allocation, marketing agent Knight Frank said. There is no development charge payable for the site.

The development has about 65 years left on its 99-year lease.

The site has a land area of about 82,379sqft and is zoned for residential use with a 7.2 plot ratio. It has a gross floor area of about 675,000sqft, and can yield more than 500 apartments of 1,200sqft each.

The building has been hailed as one of Singapore’s architectural landmarks. The URA said in March that the public had asked for the horse-shoed shaped tower to be conserved.

This is the fourth time that the 37-storey development has been put up for en bloc sale. The tender for Pearl Bank Apartments will close at 3pm on Nov 3.
Experts say the gloomy economic outlook made it even more difficult for mega collective sale sites of over $500 million to find buyers – so owners are starting to moderate their expectations.

Developers prefer to deal with projects with price tags of under $100 million as such sales involve less risk, they add.

Mr Nicholas Wong, Knight Frank’s head of investment, noted that there have been eight to nine of such mega collective sale sites. These include Laguna Park, Hawaii Tower and Pine Grove.

Interest in such sites has been muted, partly due to the worsening economic climate and the Government’s ample release of state land, which has siphoned capital away from collective sale sites.

Mr Wong said that while there were expressions of interest from developers when Pearl Bank was first launched for sale in March, the shaky global recovery even back then had spooked developers.

“But larger sites like these are attractive to some developers, as they are in more mature areas, while the government land sale sites are mostly in new towns.”

Owners of freehold condo Tulip Garden in District 10 re-launched their collective sale bid at $600 million in June, down from their $650 million price tag in January. There has been no news on whether the site has been sold.

But other collective sales have found success after owners brought down their prices.

Whitley Heights off Whitley Road, for example, reduced its asking price from between $185 million and $210 million, to $165 million. It was eventually sold at just under the price target, at $159 million last month.

Source: The Straits Times/The Business Times

It seems like the laylong-ing of older estates has started even before 2013. If the wife and I are developers, we be sitting gleefully by the sidelines waiting for the asking prices of collective sale projects to drop even further…

Click on link below to read our previous post on the Pearl Bank collective sale:
http://sgproptalk.blogspot.com/2011/04/enbloc-news-pearlbank-apartment.html
http://sgproptalk.blogspot.com/2011/03/enbloc-news-pearl-bank-apartment-take-3.html

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Pearlbank Enbloc Status: Erm…?!

More than a day has passed since the tender for Pearlbank Apartments closed at 3pm on May 25. However, there has been no news from anywhere concerning the tender status.

The wife and I are now wondering if Knight Frank is doing a “Pine Grove” on us all with regards to the tender result of Pearlbank…

If anyone has any update on the above collective sale, do share!

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Enbloc News: Pearlbank Apartment

The Business Times today reported that Pearlbank Apartments, a 99-year leasehold development on Pearl’s Hill near Chinatown, has been launched for collective sale with a $750 million price tag.

This is the third time that the 37-storey development has been put up for en-bloc sale. The site was last marketed in 2008 with the same price tag, but there were no takers then.

The asking price translates to a land price of $1,495psf ppr, including an estimated charge of $167.2 million to top up the lease to 99 years. There is no development charge payable for the site.

Built in the 1970s, Pearlbank Apartments has a potential gross floor area of about 613,530sqft. The project currently comprises 280 residential apartments and eight commercial units.

The successful developer can build around 500 – 520 new homes on the site, assuming an average unit size of about 1,200sqft, said Nicholas Wong, head of investment at Knight Frank. Knight Frank is marketing the development.

The site has a land area of about 82,379sqft. Under the 2008 Master Plan, the land is zoned for residential use with a 7.2 plot ratio.

“With its elevation on Pearl’s Hill, the site offers fantastic day and night unblocked 360 degree views of the city skyline even for the lower level units. It is a hidden gem in the city, offering developers an opportunity to reshape the skyline,” Mr Wong said. The site is also next to the Outram MRT station, he added.

If the asking price is met, owner of the 280 apartments will walk away with between $1.8 million and $4.9 million per unit, while owners of the eight commercial units will get between $1.2 million and $6.9 million per unit.

The tender for the site will close at 3pm on May 25.

The wife and I will be keeping our eyes peeled for the tender outcome of this development. This is not only because Pealbank Apartments is supposedly one of Singapore’s architectural landmarks, but also the fact that there seems to be quite a few dissenting voices amongst existing owners concerning the en-bloc process…

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Enbloc news: Pearl Bank Apartment – Take 3!

According to a ST report today, owners of units at the distinctive Pearl Bank Apartments near Chinatown are making their third attempt to pull off a collective sale.

The 280-unit development has an estimated price of $750 million. That was the price the owners rejected as too low when they tried to sell enbloc in 2007. Another deal launched in 2008 also fell through.

If the $750 million sale is achieved this time, owners of each 1,324sqft two-bedroom apartment would reap about $1.81 million – or $1,367psf – for their units, while the 3,993sqft penthouses would fetch up to $4.8 million each. That is a price of about $1,202psf.

Market rates are much lower. A 2,185sqft apartment in the 38-storey estate sold for $2.1 million, or $952psf, in January, while a 463sqft flat in nearby People’s Park sold recently for $488,000 or $1,054sqft.

The ageing 99-year leasehold project has 65years of its lease left. It has a built-up plot ratio of 7.4, with a maximum gross floor area of 613,000sqft. This plot ratio could yield more than 500 apartments of 1,200sqft.

The building has been hailed as one of Singapore’s architectural landmarks, and the URA said members of the public have asked for the horse-shaped building to be conserved.

While searching for a downloadable photo of Pearl Bank Apartment for this post, the wife and I have discovered that there are some very negative sentiments amongst owners about the collective sale process. Take a look for yourself…
http://www.pearlbankapartments.com/

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