Four collective-sale sites were launched yesterday - including Grangeford Apartments, with a whopping $660 million ‘guide price’ that is more than double the $280 million bandied about in October last year.

The latest price tag works out to $2,016 psf of potential gross floor area including an estimated $97.8 million the developer will have to pay the state to restore the site’s remaining 66-year lease to 99 years.

The unit land price is more than double the $800 psf per plot ratio (psf ppr) fetched earlier this year for next-door Horizon Towers, which is also leasehold.

Grangeford Apartments is the first collective sale with an asking price above $2,000 psf per plot ratio (psf ppr).

The record is still held by the freehold Parisian at Angullia Park, bought by Overseas Union Enterprise in December last year for $1,735 psf ppr.

The other three en bloc sale sites launched yesterday are Fairways at Telok Blangah, Nob Hill Condo and two adjoining lots in the Ewe Boon/Balmoral vicinity, and Rivershire at Leonie Hill.

Knight Frank, which is marketing Rivershire through expressions of interest, expects the 56,396 sq ft freehold plot to fetch $237 million or $1,500 psf ppr. No development charge (DC) is payable. The site is zoned for residential use with a 2.8 plot ratio - the ratio of maximum potential gross floor area to land area - and a 36-storey maximum height.

Credo Real Estate, which is handling the tender for Nob Hill Condominium at 21 Ewe Boon Road and two adjoining bungalows at 15 and 17, says it expects the combined site of 63,572 sq ft to fetch about $95 million or $1,100 psf ppr including an estimated $17 million DC. The freehold site is zoned for residential use with a 1.6 plot ratio and 12-storey height limit.

In the Telok Blangah area, Colliers is relaunching Fairways condominium. In February, it invited expressions of interest with an indicative price of $232 million or $750 psf ppr, including DC and the cost of amalgamating an 8,288 sq ft state plot next door.

This time around, Colliers has indicated a higher price of $238 million, which works out to $773 psf ppr. With the positive sentiment generated by the recent launch of Reflections at Keppel Bay, Colliers hopes it can achieve a much higher price for Fairways owners.

So far, 90 per cent of 350 units released at the 99-year leasehold Reflections at Keppel Bay have been sold, achieving an average price of $1,900 psf.

Colliers has convinced the requisite 80 per cent of Fairways owners to sign the collective-sale agreement and is launching the site through a tender, unlike the February exercise, which was an expression of interest.

CB Richard Ellis, which is handling the expression of interest for Grangeford Apartments, says the $660 million guide price translates to proceeds of $3 million a unit for two-bedroom unit owners and $3.8 million each for those who own three-bedroom units.

While such prices should help persuade owners who are worried about not being able to buy replacement homes nearby, it remains to be seen whether the market will pay them.

Market watchers reckon the minimum price for Grangeford could be 10-15 per cent lower, or about $560 million to $595 million.

Based on the upper end of this range, the unit land cost works would be $1,845 psf ppr. Market watchers reckon the break-even cost could be $2,400 to $2,500 psf.

Earlier this year, a consortium led by Hotel Properties paid $500 million or about $800 psf ppr for the 204,742 sq ft Horizon Towers site next door.

Under Master Plan 2003, the Grangeford Apartments plot is zoned for residential use with a 2.8 plot ratio and a 36-storey height limit.

However, the assumption being made is that the authorities will allow a new development on the site to retain the current existing gross floor area of 375,466 sq ft, which reflects a 2.87 plot ratio.

CBRE says that even if the developer builds an additional 10 per cent gross floor area allowed for balconies, no DC is payable as the development baseline is high - at 547,926 sq ft or an equivalent plot ratio of 4.18.

Source: The Business Times, 24 April 2007