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En bloc fever rages as Pearlbank aims for S$728m

Posted by SG Property Home on November 16, 2017
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Owners of the iconic Pearlbank Apartments are hoping that the en bloc fever will last as the tender for its sale will be launched with a reserve price of S$728 million. Meanwhile, Parkway Mansion in Katong, Derby Court near Novena and Riviera Point close to Great World City also jumped onto the collective sale bandwagon.

Condominium projects Pearlbank Apartments and Parkway Mansion will launch separate tenders for collective sale on Thursday.

The reserve price for Pearlbank, a 37-storey development in Outram, translates to a land cost of about S$1,505 per square foot per plot ratio (psf ppr), after factoring in an upgrading premium of about S$195 million for the lease top-up. There is no development charge payable.

Meanwhile, Parkway, a 32-unit condominium near the Katong district, has a good price of S$138 million, which excludes an estimated development charge of approx S$21 million payables to the state for the intensification of land use. Taken together, the indicative price and the development charge translate to a land rate of S$1,454 psf ppr.

An iconic horseshoe-shaped building is near the central business district (CBD) area, Pearlbank comprises 288 units, including 8 commercial units, and has a 99-year leasehold tenure.

While the development has an overall plot ratio of 7.2 under the 2014 Master Plan, it has a present gross plot ratio of 7.4479.

This is Pearlbank’s fourth attempt at an en bloc sale – it was put up for sale previously in 2007, 2008 and 2011. In 2015, plans to gazette it for conservation did not materialize as the liaison committee failed to obtain a 100% approval from the owners, required for the go-ahead.

The site has the potential to be redeveloped into a residential development with a total gross floor area of 56,998.8 sq. m., comprising 730 new residential units with an average size of 800 sq ft, subject to approval from the relevant authorities.

Apartment owners, whose unit sizes range from 123 sq. m. to 371 sq. m., stand to receive minimum gross prices of between S$1.8 million and S$4.9 million. These proceeds are about 55% above the last transacted price in September 2017.

Additionally, owners of commercial units with sizes ranging from 65 sq. m. to 523 sq. m. can potentially receive S$1.2 million to S$6.9 million.

For Parkway, this is the third collective sale attempt by the development’s owners. Depending on the size of their property, each owner could receive between S$4.2 million and S$4.4 million in gross proceeds from the sale.

Apartment sizes at the 17-storey development range from 169 sq. m. to 181 sq. m. Under the 2014 Master Plan, the 3,620.9 sq. m. the site is zoned residential and has a gross plot ratio of 2.8, with a potential total gross floor area of 10,138.5 sq. m.

Tenders for Pearlbank Apartments, Riviera Point, and Parkway Mansion will close at 3 pm on Dec 19, Dec 18 and Dec 13 respectively.

Sentiment in the residential market has improved following a down cycle that spanned four years. New home sales have been brisk this year and prices picked up in the third quarter, will make a positive turn in the market.

Indeed, over the past 7 months, about 16 private residential estates have put up for en bloc sale. And with many others underway, the government is expecting a more than doubling of private residential units available for sale over the next couple of years, said Minister for National Development Lawrence Wong.

Speaking at the 58th-anniversary dinner of the Real Estate Developers’ Association of Singapore (Redas) on Tuesday, Mr. Wong also advised home buyers to be prudent about their purchases amid an oversupply in the property market.

Owners are rushing in now because they want to get ahead of the holiday season while developers are still around for evaluation.

With a finite demand for property and many en bloc sales coming onboard, owners would like to be considered very sooner rather than later.

Adapted from: The Business Times, 16 November 2017

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