The significant en bloc sale in Singapore in 2009 can be achieved if the owners of condominiums will concur to a price which is cheaper compared to what has been expected.
Roxy-Pacific, a boutique developer, has agreed to purchase a site at Spottiswoode Park, but at a price lower than the original reserve price of the estate.
The developer revealed in an announcement to the Singapore Exchange yesterday, that the company has offered to acquire the freehold condo site of Dragon Mansion for $860 per sq. ft. (psf) per plot ratio or $100.8 million.
With a maximum of 2.8 plot ratio and about 3,890 sq. meter land area, the site’s asking price is $1,020 psf per plot ratio, or $120 million.
According to the statement that Roxy-Pacific released, a new set of signatures is required since the asking price is way under the indicated reserve price. The deal must have the approval of no less than 80 percent of condo owners. Afterwards, a Strata Titles Board’s sales order may be needed.
When the Dragon Mansion became the primary launched collective sale in July 2009, market observers said the asking price for the site was more appropriate for the boom times.
They commented that developers may not be ready yet to pay at that level since the price of $1,020 psf per plot ratio is much higher compared to the transacted collective sale prices for the site during the boom in 2007.
According to Nicholas Mak, a lecturer at Ngee Ann Polytechnic, even for a price of $860 psf per plot ratio, the price is still higher than the prices during the boom period. He added that the break-even price is approximately $1,300–$1,400 per sq ft.
CKS Property Consultants, the marketing agent for the site, said yesterday that it was working towards closing the transaction.
Several en bloc sale sites have been introduced since Dragon Mansion came on the market, but no sales have been made yet. The collective sale tender at Laguna Park’s 528 units closed unsuccessfully the previous week. Its $1.2 billion reserve price works out to $844 psf per plot ratio.
According to Chris Teo, the managing director of the company, it needs to reload its landbank. Dragon Mansion will become the third land site of the company should Roxy-Pacific manages to close the deal.