A plotted acquisition of an enbloc site worth $44 million in the Cairnhill area was withdrawn by a developer, infuriating a few home owners.
Jewel 1, the firm involved, attributed “difficult, uncertain and deteriorating market conditions” for it to decide to back away from Cairnhill Heights acquisition. Yesterday, the condo’s sales committee stated that the firm’s decision was made 20 days prior to the completion of deal, with the 19-unit condo expected to be completed by 24 February. Needless to say that the $2.2 million deposit of Jewel 1 will be forfeited due to the move.
One home owner, who also happens to be a sales committee member, expressed his sentiment on the matter saying, “This really feels like a stab in the back. Where is the good faith?” Jewel 1’s decision happened in spite of a lengthy legal battle, wherein the firm stood up for its right in buying the site. It has summed-up it decision through a letter to the concerned lawyer of the planned buying.
ST was told by three members of the sale committee that the developer left them disappointed as they considered it as an associate in a deal which they had defended against challenges, thinking that Jewel 1 was a dependable property developer.
Jewel 1 has a lone director and shareholder – Mr. Cheong Sim Lam – who refused to give any comment regarding the matter. Hong Fok Realty is also owned by Mr. Cheong’s family. Mr. Cheong is also Simon Cheong’s uncle who is the CEO of SC Global. He agreed on the acquisition of Cairnhill Heights in May 2007, during the surge in property and accompanied by a craze in collective sale deals.
It was in March the previous year when the Board of Strata Titles approved the sale, with an objector coming from Cairnhill Heights subsequently taking the case to the High Court. In November, however, it lost the appeal.
“Having been on the same side for almost two years now, sometimes fighting shoulder-to-shoulder to secure the sale, the last thing you would have expected is for your contracting party to turn around and leave you in the lurch”, said a sale committee member. All options regarding potential legal recourse have been reserved, said the sale committee.
The forfeited deposit will be distributed to the owners of the 19-unit condo, once deduction for expenses is already calculated. If the acquisition has been passed, every home owner would have been given $1.97m to $2.5m, with the sole owner of the penthouse to acquire about $5.5m. Around 50 percent of the owners have hired out the units that they own.
It is believed that at least a single owner have already purchased a property in replacement, thinking that he would soon be getting the full sale price. Unfortunately, the owner is now caught with two domiciles. “We felt aggrieved, having committed for more than two years to sell this property while the market kept climbing. Now, we have missed all our selling opportunities of this cycle. And the buyer only forfeits a miserable 5 per cent”, said Georg Mechtler, an owner and a businessman.
However, Jewel 1’s decision seemed not to upset all owners, with one saying that she is glad that Cairnhill Heights, being an architectural icon, is preserved.