Property giant CapitaLand is paying $1.3388 billion for the sprawling Farrer Court estate - the biggest lump sum ever shelled out for residential

Property giant CapitaLand is paying $1.3388 billion for the sprawling Farrer Court estate - the biggest lump sum ever shelled out for a residential site in Singapore.

Owners at the 618-unit estate will get about $2.15 million each, depending on the size of their flats, which range from 1,453 sq ft to 1,615 sq ft.

The bumper price for the former HUDC estate beat the reserve price of $1.2 billion but fell short of the owners’ asking price of $1.5 billion.

It also signals how high and how fast prices have risen this year. Farrer Court owners had revised their reserve price from $700 million to $840 million at the start of the year, only to push it up to $1.2 billion in March.

Credo Real Estate, which brokered the deal, said the sale is also the largest one in terms of land area, number of units and buildable gross floor area.

Farrer Court, which is 30 years into a 99-year lease, sits on 838,488 sq ft of land near the junction of Farrer Road and Holland Road. It is also close to the upcoming Farrer MRT Station.

It is the only site on Farrer Road with the potential to be built up to 36 storeys.

CapitaLand said it plans to build a ‘luxurious’ 36-storey condominium with about 1,500 ‘generously-sized’ flats on the site, which will be ready for launch in early 2009.

Existing Farrer Court owners will have the first right of refusal to buy units at the new development, it said.

CapitaLand president and chief executive Liew Mun Leong said the deal would further boost its residential land bank, allowing it to benefit from Singapore’s ‘growth story’.

The site also gives the developer the chance to work with world-renowned architects to create a unique landmark project, he added.

The Farrer Court tender closed on Wednesday and attracted two bids, both above the reserve price.

Credo Real Estate declined to comment on the second bid, but sources said it came from GuocoLand, which had paid a then-

record $835 million for the freehold Leedon Heights site in Holland Road in April.

CapitaLand’s price for Farrer Court works out to about $762 to $783 per sq ft (psf) of potential gross floor area.

This psf price includes about $450 million to $500 million to maximise the use of the land and to top up the lease to a fresh 99-year tenure.

The deal is subject to the approval of the Strata Titles Board and should be completed by the second quarter of next year.

CapitaLand intends to share its risks with partners but will be the lead development manager for the project.

It said yesterday that Hotel Properties (HPL), US-based Wachovia Development Corp and possibly a foreign fund will join it in the venture.

CapitaLand is likely to hold 35 to 40 per cent of the joint venture while HPL expects to take a 20 to 30 per cent interest.

HPL took a stake in an earlier CapitaLand purchase of another former HUDC estate, Gillman Heights, in Alexandra Road, which cost $548 million, or $363 psf of potential gross floor area.

The sale of Farrer Court leaves the 290-unit Pacific Mansions in River Valley Close as the only estate up for sale at more than $1 billion.

Owners of Pacific Mansions are asking for $1.18 billion or about $2,400 psf of potential gross floor area.

Source: The Straits Times, 29 June 2007