DESPITE the cooling off in the property market, there seems to be something of a rush to launch collective sale sites this week.

DESPITE the cooling off in the property market, there seems to be something of a rush to launch collective sale sites this week.

The latest offerings are Chateau Eliza at Mount Elizabeth, Toho Garden in Yio Chu Kang, Vista Park at South Buona Vista Road, and a stretch of 15 houses at Jalan Bunga Raya near Balestier Road.

Property consultants said there are a string of other collective sale cases where agents have either recently secured the minimum consent levels or are rushing to do so before new en bloc sale legislation kicks in early next month.

In some cases, agents have had to raise minimum reserve prices a little in the collective sales agreements to entice the last few owners to sign up.

However, in other instances, they have also managed to persuade owners to set more realistic expectations, pointing to the perils of not achieving the minimum consent levels before the new rules are in force. The various processes and safeguards entailed in the new rules are expected to lengthen the time taken to get collective sale sites ready for launch, market watchers said.

CB Richard Ellis executive director Jeremy Lake said the US sub-prime mortgage woes in the past four to six weeks have also served to add a dose of realism to owners’ price expectations, helping to expedite securing minimum consent levels in some instances.

‘Prior to that, it seemed like a never-ending party,’ he said.

DTZ Debenham Tie Leung director (investment advisory services) Shaun Poh said: ‘I would say that in 50 per cent of our cases, we’ve had to up the reserve prices a bit to get the last few owners to sign up. But we’re also trying to ensure owners’ pricing expectations are realistic.’

In the remaining cases, Mr Poh did not have to raise minimum prices but persuaded owners to be more realistic and sign up.

‘Our advice to clients is: Let’s lock in the 80 per cent consent level first, before the new laws take effect. We can then watch the market and see how new residential property launches in the location fare before deciding whether to launch the tender for our en bloc sites,’ Mr Poh said.

Chateau Eliza at Mount Elizabeth has an indicative price of about $115 million to $120 million, which works out to $2,130 to $2,222 psf per plot ratio (psf ppr). No development charge (DC) is payable.

In July, the site was launched through an expression of interest before the minimum consent level had been secured, with an indicative price of $120 million.

Marketing agent Credo Real Estate is now launching a tender for Chateau Eliza as it has secured consent for a collective sale from owners controlling more than 80 per cent of share values. The freehold site has a land area of 17,997 sq ft and can have a maximum gross floor area of nearly 54,000 sq ft, based on preliminary checks.

Over in South Buona Vista, Newman & Goh is launching the tender for Vista Park, which stands on a site with a remaining lease of about 71 years. Owners are looking at about $265.7 million, which reflects a unit land price of about $680 psf ppr, inclusive of an estimated $37.3 million payable for upgrading the site’s lease to 99 years. No DC is payable.

Newman & Goh is also offering the freehold Toho Garden at Yio Chu Kang Road with an 86,881 sq ft site area through a tender. Its owners are seeking $60.8 million, which works out to $580 psf ppr including an estimated $9.7 million DC. Both Vista Park and Toho Garden have a 1.4 plot ratio (ratio of maximum gross floor area to land area).

DTZ has also launched the tender for Nos 1-15 Jalan Bunga Raya, with a freehold land area of 24,058 sq ft. Access to the terrace houses is by a road which can be alienated by the state for about $7 million, boosting the total land area to about 32,978 sq ft, according to DTZ.

A DC of $263,000 is also payable. The $66 million to $67 million price expected by owners reflects an all-in unit land price of about $800 psf ppr. The site is designated for 2.8 plot ratio.

Meanwhile, Jones Lang LaSalle yesterday launched the tender for a 28,798 sq ft freehold residential site with a 2.8 plot ratio at River Valley Road for sale by tender. It did not indicate price expectations in its release.

Source : Business Times - 27 Sep 2007