Ravi Chandran
Mandarin Gardens in Siglap eyes a new en bloc record by raising their asking price from the previous $2.48 billion to $2.79 billion. Today Online which first reported on this new en bloc price sought by the owners of the development, said the asking price was increased after the development was found to be undervalued by more than $300 million.
If they are successful with their revised asking price, Mandarin Gardens will set a new en bloc record. Pandan Valley set the previous high with its $2.6 billion asking price.
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Mandarin Gardens’ Collective Sale Committee (CSC) said they discovered the disparity in land value following a check with the Urban Redevelopment Authority (URA) on Mandarin Gardens’ development baseline record. “The drastically increased baseline we received resulted in a corresponding reduction of the differential premium, which enables us to increase the reserve price, and at the same time reduce the per sq ft per plot ratio (psf ppr) for the developers,” he said in a notice sent to residents.
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The marketing agent for the collective sale effort, C&H Properties, believes that despite the new property cooling measures introduced in July which has helped to cool the en bloc fever, the 12.5 per cent increase in the new en bloc sale asking price is a winning proposition for both developers and sellers. They made the development more attractive to prospective buyers by reducing its price per square foot per plot ratio (psf ppr) from S$1,236 to S$1,191.
The CSC hopes that its new en bloc sale price would give the collective sale bid a shot in the arm, as they have so far garnered 62 per cent approval from residents — 18 per cent short of the 80 per cent requisite for a collective sale.
International Property Advisor CEO Ku Swee Yong said this is the first time he has encountered an en bloc effort raising its price due to the discovery of an inaccurate land value estimation. He noted that using nearby condominiums such as Seaside Residences which was launched at $2,000 psf last year as a benchmark, Mandarin Gardens’ psf price of $1,191 provides developers with sufficient margins. He added that the price adjustment could prove to be a futile exercise given that $2.79 billion is an enormous price tag.
With the new en bloc sale price, each owner stands to gain an average of $2.8 million if the sale is successful.
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Paul Ho, chief mortgage consultant at iCompareLoan, said the 99-year leasehold development, with 1,006 units, sitting on sites close to or over one million sq ft, is so big that given the current market conditions, even the big boys may not have a risk appetite for.
“Developers interested in bidding for collective sales of Mandarin Gardens have to be mindful of other cost factors like development charge and Additional Buyers’ Stamp Duty, which may push up the actual costs for them even higher,” Mr Ho said. Adding: “With the upgrading premium, the actual bill for the developer could be pushed to be in the region of $3 – $4 billion.”
The attempt to sell Mandarin Gardens en bloc failed 10 years ago when the sales committee pushing for the collective sales of the condominium was accused of trying to control the management council running the estate and voting down proposals to upgrade estate facilities.
Mr Ho asks if Mandarin Gardens be the single biggest uniting force to let property developers come together and work together?
“Previously, it was a case of too many developers and too few Government land sales plots. As no developer want to wind down their business, they bid increasingly higher to win land bids. The ability to price higher depends on whether there is a recession or not and whether people have sufficient choices of units to choose from. This is like 3 or 4 projects worth of condominium in 1 deal.
Are we trying to fish for a giant developer such as Century Garden or maybe Forest City type. These kind of developers could hail from China. They could easily move many units to Chinese buyers. In a new twist, the new condominium would go from “Mumbai” Gardens to “Chinese” Gardens. This is like an entire town in one condominium project, maybe it can have it’s own school, it’s own clinics, own police stations, own cinemas, own LRT tracks within the compound.
Fancy the new project being able to house 3,000 to 5,000 units? And each house having 4 people. That’s like an entire Electoral ward in a condominium. And maybe you can have your own MP stay within your condo as well. And the Condo manager is also your Management committee chairperson and your MP.
But it could also signal the start of developers cooperating to share bigger projects and consolidate their work force. There are too many developers and too many units in Singapore, least we want another property glut which we believe is coming, developers can work together and prevent bidding over the top. The only beneficiary is the Singapore government, not the people, nor the developers.”
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