Reserve price raised in People's Park Centre collective sale bid

Built in 1970, People's Park Centre sits on a 96,000 sq ft site, with a gross floor area of about 820,000 sq ft. It is zoned commercial under the current masterplan. The development, which has 120 apartments, 256 offices, 324 shops and a carpark, has
Built in 1970, People's Park Centre sits on a 96,000 sq ft site, with a gross floor area of about 820,000 sq ft. It is zoned commercial under the current masterplan. The development, which has 120 apartments, 256 offices, 324 shops and a carpark, has more than 50 years left on its lease.ST FILE PHOTO

$1.35b tag reflects a 45% premium over valuation for mixed-use property

One of Singapore's biggest and most keenly watched mixed-use collective sales in this cycle - People's Park Centre - has raised its reserve price from $1.3 billion to $1.35 billion and agreed on the method of apportionment for its first collective sale attempt.

A majority of those who attended the extraordinary general meeting on Wednesday passed the resolutions for the changes.

"We have one year from Jan 9, 2019 to get the 80 per cent mandate. But our target is to get the mandate within four months. If we are able to do so, the tender will be launched by the middle of the year," the spokesman for the collective sale committee, Mr Lee Chin Chee, told The Straits Times yesterday.

The new reserve price represents a 45 per cent premium over valuation, up from a 41 per cent premium, he said. "The method of apportionment is structured as such: 80 per cent is based on the valuation of the units, 10 per cent on the area of the units, and 10 per cent on share value," he added.

Apartment owners now stand to get between $1.885 million and $2.683 million; office owners, between $432,000 and $4.431 million; and shop owners, from $267,000 to $16.4 million. The owner of the carpark stands to get $56.7 million, Mr Lee said.

Built in 1970, People's Park Centre sits on a 96,000 sq ft site, with a gross floor area of about 820,000 sq ft. It is zoned commercial under the current masterplan. The development, which has 120 apartments, 256 offices, 324 shops and a carpark, has more than 50 years left on its lease.

But some owners have objected to the sale. "Only 62 shop units had their sales proceeds adjusted higher by a total of $9 million. The other 639 units remained unchanged. That is the main (source of) disgruntlement among those objecting. Some also think the reserve price is too low," Mr Lee added.

TARGETING EARLY TENDER

We have one year from Jan 9, 2019 to get the 80 per cent mandate. But our target is to get the mandate within four months. If we are able to do so, the tender will be launched by the middle of the year.

MR LEE CHIN CHEE, spokesman for the collective sale committee.

While mixed-use properties continue to be popular, there is a growing list of commercial buildings which had collective sale tenders that closed last year but remained unsold. They include Jalan Besar Plaza and Verdun House.

After last year's July 6 property cooling measures, a total of 35 collective sale tenders - including relaunches - have closed without a sale. Of these, 31 are residential projects, two are mixed-use and two are commercial projects. The 35 tenders have a combined value of nearly $8.8 billion, according to data from Colliers International.

"We expect developers to remain cautious and selective in landbanking activities. By the middle of this year, with the relatively healthy take-up since the curbs, and assuming a benign economic outlook, developers could be more active in landbanking again," said Ms Tricia Song, Colliers' head of research for Singapore.

JLL senior consultant Karamjit Singh believes there are still some pockets of opportunity in commercial rather than residential collective sales. "There is still hot demand for hotel use. Interest for residential sites will be good in locations that are under-supplied," he said.

Ms Ong Choon Fah of Edmund Tie & Company noted that "like Golden Mile Complex, People's Park Centre was built during the early stages of nation building, so the sites hold very fond memories for a lot of people".

She added: "With commercial rents rising, there will be interest. You don't often get locations like Chinatown for collective sale."

A version of this article appeared in the print edition of The Straits Times on January 11, 2019, with the headline 'Reserve price raised in People's Park Centre collective sale bid'. Print Edition | Subscribe