Normanton Park makes second bid at selling en bloc

Normanton Park is a 488-unit project near Kent Ridge Park. Exclusive marketing agent Knight Frank Singapore's Ian Loh noted that there has not been any new high-rise residential development launched within a 1.5km radius in the last 15 years, leading
Normanton Park is a 488-unit project near Kent Ridge Park. Exclusive marketing agent Knight Frank Singapore's Ian Loh noted that there has not been any new high-rise residential development launched within a 1.5km radius in the last 15 years, leading to low supply in its locality.ST FILE PHOTO

It is setting an $800m reserve price; it failed in first bid in 2015

Owners at former HUDC estate Normanton Park hope it will be second-time lucky in its collective-sale bid at an $800 million reserve price.

As the number of sales en bloc continued to rise here, the owners mounted a military-style operation to get the 488-unit project near Kent Ridge Park on the market in double-quick time.

Mr S. S. Chopra, the sale committee chairman and a retired navy colonel, said: "It took a mere 11 days for us to reach the 80 per cent consensus and a further two weeks to launch the tender today.

"This very quick and short duration... was achieved through the enthusiasm of owners and great collaboration between the marketing agent, lawyers and sale committee."

The Normanton Park owners are among those capitalising on what market observers call the early stages of collective-sale fever, which began heating up after property cooling measure adjustments in March boosted buying sentiment, and limited sites offered in the Government's land sale programme for the second half.

It failed in its previous bid in 2015.

Normanton Park will launch a collective sale at a minimum price of $800 million after more than 80 per cent of owners approved the collective-sales agreement (CSA) in less than two weeks. The tender will close on Oct 5 at 3pm.

GOOD CHANCE OF A HIGH BID

There's a possibility that bids could be higher than $800 million. $898 psf ppr is near the high end of the range for land prices in that location. In today's market, there may be some developers who are willing to pay even higher than reserve price in order to secure attractive sites to replenish their land bank.''

MR NICHOLAS MAK, head of research and consultancy at ZACD Group.

This is one of the highest reserve prices after Tampines Court, a privatised HUDC estate, is said to have received a bid of $970 million with conditions attached. That deal is not officially closed yet.

So far this year, seven successful collective sales worth $2.5 billion have been mounted, compared with just three for the whole of last year totalling about $1 billion.

Based on the reserve price, each Normanton Park unit owner could get between $1.6 million and $1.8 million. This translates to a land rate of about $898 per sq ft per plot ratio (psf ppr), which includes a differential premium for intensification of the site of about $225.3 million, and a top-up premium of $220.6 million for a fresh 99-year lease.

Of interest is whether the bids will go higher than the $800 million reserve price, Mr Nicholas Mak, head of research and consultancy at ZACD Group said.

"There's a possibility that bids could be higher than $800 million. $898 psf ppr is near the high end of the range for land prices in that location. In today's market, there may be some developers who are willing to pay even higher than reserve price in order to secure attractive sites to replenish their land bank. But as more collective-sale developments come to market, there will also be more land available to satisfy their hunger.''

Exclusive marketing agent Knight Frank Singapore's Ian Loh noted that there has not been any new high-rise residential development launched within a 1.5km radius in the last 15 years, leading to low supply in its locality.

"The new high-rise development could potentially comprise more than 1,200 new residential units of 100 sq m on the site, and home owners should be able to enjoy lush greenery and unblocked views. As such, we expect... strong interest," Mr Loh, Knight Frank's executive director & head of investment and capital markets, said.

A version of this article appeared in the print edition of The Straits Times on August 22, 2017, with the headline 'Normanton Park makes second bid at selling en bloc'. Print Edition | Subscribe