SINGAPORE - Residents of the Spring Grove condominium in Grange Road are launching a collective sale attempt with a $1.39 billion price tag, in spite of the current lacklustre demand in the property market.
If successful, it will be the largest en bloc deal concluded, surpassing CapitaLand's purchase of the former Farrer Court for $1.34 billion in 2007.
The 99-year leasehold property, which has about 75 years left on its tenure, got the green light for the sale after it obtained the requisite 80 per cent consent from its owners in March. It comprises three blocks that are 20-storeys tall, with 325 units.
Owners are expected to receive $2.6 million to $6.9 million each in proceeds - or about $2,600 per sq ft on average - for the 263,513 sq ft development, said Mr Ian Loh, head of investment and capital markets at Knight Frank, who is the broker.
Spring Grove is the largest residential development along Grange Road, said Mr Loh, and has a maximum permissible gross floor area of 553,377 sq ft based on a plot ratio of 2.1.
"It is also one of the few residential plots remaining in the Orchard Road area to be made available for redevelopment into a large-scale luxury condominium," he added.
Although the condominium has a leasehold tenure, the US Government holds the land plot's freehold title, which means ownership will return to it once the site's lease is up.
Spring Grove's price tag includes the premium required to top up its lease to 103 years. Excluding this, its land price alone is $2,512 psf per plot ratio (ppr).
The breakeven cost for the project to be redeveloped is expected to be between $3,400 to $3,500 psf, said Mr Loh.
He noted: "If the market continues to slow down over the next few quarters, we believe the Singapore Government may review and tweak some of the current property cooling measures in place to meet the needs of buyers.
"We expect Singapore's real estate market to see sustained demand from foreign homebuyers and investors due to its strong economic fundamentals and attractiveness as a safe haven."