The lacklustre property market enjoyed a shot of adrenaline yesterday with news that the sprawling Normanton Park condominium is up for a collective sale with an asking price of around $840 million.
The ambitious move by the owners of the 38-year-old estate near Kent Ridge Park seems to fly in the face of prevailing market trends, which all point to slowing sales.
Only 341 new private homes were sold last month, a striking fall of 33.5 per cent from the 513 units moved in August, according to the Urban Redevelopment Authority yesterday.
The 488-unit Normanton Park would be the biggest collective sale in eight years if it goes through, but experts are sceptical.
SLP International Property Consultants research head Nicholas Mak said it will be "a tough sell". "The large size and investment quantum are deemed to be riskier by developers," he said.
The 99-year leasehold estate is on a sprawling 660,000 sq ft site with a reserve price said to be in the region of $840 million. A sale at that level would make it the largest collective deal since Farrer Court was sold at $1.3 billion and Leedon Heights at $835 million in 2007.
Marketing agent Mount Everest Properties said a developer would have to stump up an additional $300 million or so to top up the lease, which has 61 years to run, and account for the development charge. Factoring in these costs, the overall price would work out to about $820 per square foot per plot ratio, as the site has a plot ratio of 2.1. Each owner could stand to pocket $1.6 million to $1.7 million on average.
Businessman Anthony Chai, 58, who owns a second-floor unit, had hoped his home would fetch more money, but went along with the sale decision as the estate is ageing."If the guy upstairs turns on his shower, there is a leak in my roof because the sealants have already gone bad after so many years."
There has been only one large collective sale this year, when SIN Capital Group bought Thong Sia Building, along Bideford Road, for $380 million in July.
Amber Park, Spring Grove and Riviera Point are among the many that tried their luck in recent years but failed to find a buyer.
"We will be speaking to some developers with the objective of getting them to form a consortium to invest and to bid for this site," said project consultant Dillon Loi of Mount Everest Properties. Part of the strategy involves reaching out to foreign developers, including those in China, he added.
The tender for the Normanton Park sale closes on Jan 19.