Homeowners in a condo complex near Singapore’s Ang Mo Kio area are making their second attempt at collective sale in four months as investors remain confident in developer demand for land despite cooling measures introduced in December.
“We are reasonably hopeful of the eventual success of this en bloc sale,” said Nicholas Mak, head of research and consultancy at ERA Real Estate, which is marketing the property on behalf of the owners. “Property developers are still eager to acquire residential land as their land bank and stocks of homes for sale are running low.”
The Chuan Park condominium in Serangoon district is being offered at the same S$938 million ($689 million), price which failed to attract a buyer in a tender which ended in November, after the freehold Vicenta Lodge residential site in Kembangan sold for S$27.2 million on Tuesday and the Baode Building in Geylang sold via a private treaty for S$27 million earlier this month.
Despite sales of new private homes in Singapore falling by 22.5 percent last month compared to January, according to data released this week by the country’s Urban Redevelopment Authority, analysts still expect the re-tender to be well received as land-hungry developers continue to replenish their land banks particularly for mid-market sites in residential areas outside the city’s central region.
With developers continuing to snap up condo complexes this year, Chuan Park is zoned for development of up to 78,153 square metres (841,231 square feet) of gross floor area, which translates into S$1,256 per square foot of finished housing. ERA said the current reserve price also takes into account an upgrading premium of S$192.62 million paid to boost the existing floor area by 7 percent.
Nicholas Mak, research head at ERA Real Estate estimates that the prospective buyer can redevelop the 37,216 square metre site at 240-250 Lorong Chuan into a 900-unit condo tower which would more than double the current 444 homes and two commercial units on the plot.
The property, which has 40 years remaining on its 99-year leasehold tenure, is located near Lorong Chuan MRT station, with access to major transport networks like Upper Serangoon Road, Central Expressway and Kallang Paya Lebar Expressway.
Situated in a mature housing estate, the site is convenient to the Australia International School and Stamford American International School, as well as parks, healthcare facilities and shopping malls.
ERA said that this latest tender is scheduled to close on 26 April.
This latest attempt to sell the 1984-vintage building follows the unsuccessful tender last year that closed on 18 November and an initial attempt in 2018 which also failed to end in a sale after homeowners raised their asking price at the time to S$900 million from the original target of S$790 million.
For Pow Ying Khuan, who heads the research department at 99.co, the success of recent residential developments in the area may be boosting homeowner confidence and paving the way for projects like Chuan Park to have another try at a collective sale.
Pow noted that major suburban projects launched in the last four years, such as the 2,203-unit Treasure Tampines condo tower by local builder Sim Lian Group, and Oxley Holdings’ 1,472-home Riverfront Residences project just 15 minutes’ drive away from Chuan Park have either sold out completely or found buyers for the overwhelming majority of their units
“Moreover, the last new launch in the Lorong Chuan area was about 10 years ago,” the analyst said. “With a land rate of S$1,256 psf ppr, it is still within a reasonable range and would appeal to developers looking to replenish their land bank significantly in the OCR.”
The Chuan Park site was put up for tender the same day that Vicenta Lodge – a freehold development located on Lorong Marzuki in southeastern Singapore – was sold at S$968 per square foot of accommodation via a private treaty, PropNex Realty said on Wednesday.
Occupying a 1,977 square metre residential plot, the property was relaunched for sale last month at nearly S$2 million less than the initial S$29 million reserve price set in an earlier sale attempt in April of last year.
Property Curbs Hit Market
While the Chuan Park owners keep their faith in residential demand, Singapore home sales stumbled hard last month under the weight of higher stamp duties and stricter lending rules imposed in December, combined with seasonal weakness from the Chinese New Year holiday, as sales of new private homes fell to 527 units last month from 680 in January.
The URA reported that sales declined across all regions of the island, with transactions outside the central region taking the biggest hit with deals falling by 42.9 percent drop from January to total just 160 homes last month.
In the second-hand condo market, data from 99.co showed that second sale of units dipped by 9.5 percent to 1,013 homes in February from 1,119 units the previous month, with 64 percent of the total volume coming from sales outside the central region. While home sales slid, owners kept confident in the prices, with price going up at the same time that deal volumes fell.
“Despite the decline in terms of volume for both new sale and resale condos in recent months, prices remain strong as the condo resale market continued its ascent for the 19th straight month in February 2022,” Pow said. “With diminishing supply in both the new sale and resale condo markets, we are seeing robust demand from genuine homebuyers purchasing for their own occupancy and developers’ appetite for residential sites should remain healthy for the rest of 2022.”