Strata Titles Board (STB) threw out the en bloc sale of the Leonie hill property on a technicality.

Jubilant minority owners of Horizon Towers hugged and congratulated one another in court yesterday after the Strata Titles Board (STB) threw out the en bloc sale of the Leonie hill property on a technicality.

‘While some have made the issue out to be one about money, to some others it’s more than that - my clients are now very happy that they can keep their homes,’ said Philip Fong of Harry Elias Partnership, who represented a group of minorities.

But not everyone is pleased. The buyers of Horizon Towers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - are considering their next move, which could include legal action against the sellers and the sales committee of Horizon Towers.

HPL said last night that it is ‘considering STB’s decision and reserves all its rights, including its rights against the subsidiary proprietors of the property who signed the collective sale agreement and the sales committee of the property’. It said that it would make further announcements if and when there are material developments.

HPL was represented by Senior Counsel K Shanmugam and William Ong of Allen & Gledhill.

HPL’s stock fell 20 cents to close at $4.68 yesterday.

STB’s rejection of the sale was unexpected - as was its brief, two-line judgment delivered after lunch yesterday.

Lawyers for the parties, who had spent a week putting their arguments to the board, told BT that they were taken aback when STB announced abruptly that it had decided to reject the application for a collective sale order because ’statutory requirements’ had not been met.

STB did not say what these requirements were. And attempts by BT to contact STB and the sellers’ representative, Senior Counsel Jimmy Yim of Drew & Napier, were unsuccessful.

But BT understands that the application for a collective sale order may have been rejected because insufficient notices were posted and some documents were not filed.

STB’s decision could have been prompted by arguments put by Senior Counsel Michael Hwang, representing a minority owner.

Mr Hwang said that his client objected to the collective sale because the application for the sale order did not comply with provisions in the Land Titles (Strata) Act, which governs collective sales in Singapore.

Legally, if an application to STB does not comply with requirements laid out in the Act, the board does not have the jurisdiction to grant an order, even if there are no objectors.

Some 84 per cent of Horizon Towers owners backed the collective sale - more than the 80 per cent requirement - but STB’s approval was still needed for the deal to go through.

STB’s decision yesterday to dismiss the application means that the en bloc sale of the property is effectively off. While the sellers have the right to appeal against the board’s decision, the lengthy process involved means that the deal is unlikely to be sealed by the Aug 11 deadline for the sale.

This could now pave the way for Horizon Towers to be sold at a higher price, thanks to the recent property boom.

The two-block development was pledged to be sold en bloc for $500 million in February. The price reflects a unit land price of $810 to $820 per square foot per plot ration (psf ppr), including a premium to top up the lease to 99 years from the remaining term of about 71 years.

If later collective sales are anything to go by, Horizon Towers could fetch a higher price. The development next door, The Grangeford, was pledged for sale in June to Overseas Union Enterprise for $625 million or about $1,820 psf ppr, including a premium to top up the lease.

That is the highest collective sale price paid for a 99-year leasehold property on a psf basis - and part of the reason for the Horizon Towers saga.

Horizon Towers’ majority owners, after signing off on the deal, became unhappy with the significantly lower price they were to receive.

Source : Business Times