Shunfu Ville set to heat up collective sale market

HUDC apartments at Block 316, Shunfu Ville. PHOTO: ST FILE

The moribund collective sale market here could soon get a boost if the planned sale of Shunfu Ville goes through - potentially the largest such deal since 2007.

About 83 per cent of the Upper Thomson project's owners by share value and total area - above the 80 per cent threshold - have signed a collective sale agreement based on a $688 million reserve price.

The collective sale committee earlier this month unanimously voted to accept a letter of intent from the interested purchaser, which is understood to be Qingjian Realty.

The parties are expected to make an announcement today, after a five-day cooling-off period for owners after signing a sale deal.

The 358-unit project was first put on sale in September with an asking price of at least $688 million or $791 per sq ft (psf) per plot ratio. The tender closed last October with no formal bids but two letters of interest. It was relaunched for tender at the same price in late January.

The last collective sales of this scale were of the former Farrer Court for about $1.34 billion and former Leedon Heights for $835 million, both in 2007.

Shunfu Ville, built in the late 1980s by the former Housing and Urban Development Company (HUDC) and privatised in 2013, sits on a 408,927 sq ft site with about 70 years left on its lease and a plot ratio of 2.8.

The site can yield about 1,100 units with an average size of 1,000 sq ft, while break-even cost could be about $1,250 psf, with new units fetching $1,400 to $1,500 psf, marketing agency JLL said.

Qingjian's bid is a sign of returning interest in en bloc opportunities owing to limited land banks on offer here, especially as the Government has cut back on its land sales programme, said Ms Alice Tan, Knight Frank's research head.

"Property cooling measures and the Additional Buyer's Stamp Duty on developers if they cannot complete and sell all units in five years have meant that the collective sales market has been very quiet. Developers are not willing to take up more risks especially for larger investment deals of above $500 million."

Yet, despite the prevailing slow market, some developers seem to be more bullish and confident of Singapore's property market in the longer term, she added.

When contacted on Tuesday, Mr Woo Hon Wai, chairman of the collective sale committee, would say only that "we are coming to the end of our collective sale attempt".

Owners have up to July 10 this year to secure a buyer and submit an application to the Strata Titles Board for its approval. "We will need to wrap it up quickly," he said.

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A version of this article appeared in the print edition of The Straits Times on May 19, 2016, with the headline Shunfu Ville set to heat up collective sale market. Subscribe