Collective sale: Mandarin Gardens fails to get green light

Mandarin Gardens first raised its asking price to $2.788 billion in November last year after the owners discovered that the land parcel was undervalued. Among reasons cited by owners who did not want to sell are the attractiveness of the location, wh
Mandarin Gardens first raised its asking price to $2.788 billion in November last year after the owners discovered that the land parcel was undervalued. Among reasons cited by owners who did not want to sell are the attractiveness of the location, which is sea-facing and has an MRT station coming up nearby, and the spaciousness of the units.ST FILE PHOTO

Despite record $2.927b asking price, only 68% of the units signed agreement, below the 80% needed

Mandarin Gardens, a sprawling leasehold condominium in Siglap, has failed in its attempt to sell en bloc, despite a record-high asking price of $2.927 billion.

On Sunday, the day the collective sales agreement expired, it had been signed by only 68 per cent of the units, below the 80 per cent required for the land to be put up for sale.

The property's collective sales committee (CSC) chairman Vincent Teo said in a letter to owners on Sunday the committee would be dissolved on Monday and he hoped those who had signed the current agreement would support an attempt to form a new committee.

"This being our first attempt at collective sales, we have learnt valuable lessons which will certainly be very helpful," he said.

An attempt in 2008 failed before a collective sales agreement was prepared, as the global financial crisis had begun, he said.

Last month, the 1,017-unit leasehold condo raised its asking price to $2.927 billion to encourage more owners to agree to the collective sale.

It first raised its asking price to $2.788 billion in November last year from $2.479 billion after the owners discovered that the land parcel was undervalued.

If the collective sale had gone through, it would have been the biggest transaction in dollar terms struck here.

  • $2.927b

  • Record-high asking price of Mandarin Gardens, a sprawling leasehold condominium in Siglap.

Prospects for such mega sites may have cooled. A number of big projects closed their tenders recently without any bids.

These included Horizon Towers, which closed on Jan 28 after it had launched for a second time at the same reserve price of $1.1 billion.

Still, some are trying their luck.

Braddell View, Singapore's largest private residential site, will be launched for collective sale by public tender tomorrow at a reserve price of $2.08 billion. The tender for the largest of Singapore's 18 former Housing and Urban Development Company estates will close at 3pm on May 28.

Mandarin Garden's Mr Teo said in his letter that the general feeling is that current market sentiment for collective sales is heading south, as evidenced by a lack of bids in the recent tender process of several large estates.

But he said that should market sentiments permit, a fresh collective sale process can be initiated without having to wait for a two-year lapse period, if 50 per cent of owners by share value sign a requisition for a general meeting to form a new CSC.

"The CSC would like to thank all the (owners) who voted for the collective sale and hope you will continue to support the effort when the next round of en bloc sales is launched, hopefully in the not too distant future," he said.

He told The Straits Times yesterday that among the reasons some owners did not want to sell is the attractiveness of the location, which is sea-facing and has an MRT station coming up nearby on the Thomson-East Coast Line.

"Some people also said it would be hard to find a replacement unit which is so spacious," he said.

The units in the condo range from 732 sq ft to 3,800 sq ft.

Property expert Nicholas Mak, who is executive director of ZACD Group, said that as Mandarin Gardens is such a large site, it would be an uphill task to get the required number of signatures for the collective sale agreement, compared with a small site of, say, 30 units.

The cooling measures implemented by the Government last July "knocked the wind out of the sails of quite a few en bloc sales", he added.

A version of this article appeared in the print edition of The Straits Times on March 26, 2019, with the headline 'Collective sale: Mandarin Gardens fails to get green light'. Print Edition | Subscribe