Mandarin Gardens fails in collective sale attempt despite record reserve price of $2.9 billion

In February this year, Mandarin Gardens raised its asking price to $2.927 billion to encourage more owners to agree to the collective sale.
In February this year, Mandarin Gardens raised its asking price to $2.927 billion to encourage more owners to agree to the collective sale.PHOTO: ST FILE

SINGAPORE - Mandarin Gardens, a 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 (March 24), the day the collective sales agreement expired, the agreement had only been signed by 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 sale committee chairman, Mr Vincent Teo, said in a letter to owners on Sunday that while the committee would be dissolved on Monday, he hoped that 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 in our next journey," he said.

An attempt in 2008 failed before a collective sale agreement was prepared, as the global financial crisis had started, 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 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.

Mr Teo said in the 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.

For example, Horizon Towers closed on Jan 28 after it was launched for a second time at the same reserve price of $1.1 billion.

But Mr Teo noted 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 collective sale committee.

He said the committee would like to thank all the owners who voted for the collective sale and hoped that they will continue to support the effort when the next round of collective sale is launched, "hopefully in the not too distant future".

He told The Straits Times on Monday (March 25) 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 that is so spacious," he said.

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

Property expert Nicholas Mak, who is the 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 sales 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.