Developer Sim Lian has snapped up sprawling Tampines Court for a cool $970 million as the collective sale market here continues to sizzle.
It is the largest such deal for a former Housing and Urban Development Company property in a decade since Farrer Court changed hands for $1.34 billion in 2007.
The 560-unit development, in Tampines Street 11, went on the market last month after two previous failed attempts at a collective sale.
The price for the privatised property works out to about $676 per sq ft (psf) per plot ratio, said Mr Terence Lian, head of investment sales at marketing agent Huttons Asia. Each owner stands to get about $1.71 million to $1.75 million.
The developer will need to make two payments to the state - one for enhancing the intensity of the site to a gross plot ratio of 2.8, representing the maximum gross floor area to land area ratio, and another to top up the lease to 99 years, from the leftover tenure of 69 years.
The value of the premiums is about $359 million - on top of the sale price.
Mr Lian told The Straits Times: "After one week of rigorous negotiations, we have reached a satisfactory resolution on the conditions to the sale of Tampines Court."
Other collective sales this year
Seven other deals on collective sales have been sealed so far this year, to the tune of $2.5 billion. This is far more than the three deals, worth $1 billion, for all of last year.
ONE TREE HILL GARDENS
The Strata Titles Board last Friday approved the year's first collective sale, which took place in May. The site went to Lum Chang Holdings for $65 million, and the developer plans to redevelop it into semi-detached houses and bungalows.
CITIMAC INDUSTRIAL COMPLEX
A freehold industrial site at the junction of MacPherson and Paya Lebar roads, the 110- strata-unit property was snapped up in late July by an unnamed foreign buyer for $430.1 million.
July also saw the former HUDC estate in Serangoon North Avenue 1, on a 296,913 sq ft triangular-shaped plot, sold for $499 million to an Oxley Holdings-led consortium.
The condominium in Meyer Road changed hands in July for $69.1 million in a deal with developer Sustained Land, and could be redeveloped into a 65-unit high-rise project.
The privatised HUDC property was sold in June for $765 million to a Jardine Matheson Group unit, MCL Land. The owners had asked for just $643 million to $653 million when launching the site for tender.
The former HUDC estate in Hougang Avenue 7 was sold in May for $575 million to Oxley- Lian Beng Venture, a joint venture comprising KSH Development, Oxley Holdings, Lian Beng Group and Apricot Capital.
GOH & GOH BUILDING
Alika Properties, a unit of BBR Holdings, in May snapped up the freehold property at 110 to 122 Upper Bukit Timah Road for $101.5 million. It comprises seven apartments and seven shops.
Property industry watchers believe the 702,164 sq ft site could be turned into a project of about 2,000 to 2,100 new units - or as many as 2,600 units, if the site is stretched to its limits.
This could be both a boon and bane for Sim Lian, the watchers said.
Mr Galven Tan, CBRE director of capital markets, told The Straits Times: "It was mentioned in the media that there was only one bidder for the tender. It was the size of the development that really deterred participation."
Sim Lian will have a window of just five years to develop and sell all the units, if it is to avoid paying additional buyer's stamp duty on the land price, analysts cautioned.
Mr Nicholas Mak, executive director of ZACD Group, said: "Presently, there is no new condo project scheduled to be launched in the vicinity of Tampines Court. Hence, there would be few competitors for the new condo project on this site."
He estimated that the break-even price for the project would be between $1,050 psf and $1,150 psf.
CBRE's Mr Tan also noted that the land's cost to developers could be passed on to buyers in terms of slightly higher home prices.
There has been a bumper crop of collective sales here this year, with more potentially on the way.
Former HUDC estate Florence Regency went up for sale on Tuesday, with an asking price of at least $600 million, just a day after Normanton Park condominium residents launched a fresh tender.
Mr Tan said that more home owners could jump on the collective sale bandwagon in the next three to six months, which will appeal to developers looking to replenish their land banks.
This could reflect an expectation of stronger market sentiment over the coming year or so.