Ravi Chandran
Colliers International on Aug 28 announced that it has successfully completed the collective sale of City Towers in Bukit Timah Road for $401.9 million. The deal completed on Aug 27 comes after obtaining a sale order from the High Court in May this year.
Colliers was appointed to lead the collective sale of City Towers in September 2017 and subsequently put the District 10 freehold development on the market on 4 January 2018.
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The freehold development City Towers at 317-325Q Bukit Timah Road was launched for collective sale for $355 million via tender. The owners’ reserve price of $355 million, including a development charge of $3.505 million to intensify land use, worked out to a land rate of $1,633 per square foot per plot ratio (psf ppr). Colliers said at that tie that this compares favourably to the $1,840 psf ppr achieved for the collective sale of nearby Crystal Tower in December. An announcement on the sale was made on 7 February 2018, hours after the collective sale tender closed.
Ms Tang Wei Leng, Managing Director at Colliers International, said “We are happy to have successfully concluded this collective sale for the owners. This is their fourth attempt and the success is a happy outcome.”
Mr M Singh, Chairman of the City Towers collective sale committee, said, “Collective sale journeys tend to be long and complex and the owners are heartened that the sale is finally completed. We are delighted that Colliers has more than delivered on the mandate from owners, achieving a premium above the reserve price. In addition, we would like to thank all parties involved in this deal particularly our lawyers for their professionalism and the owners for their support and patience.”
City Towers – near the Newton and Stevens MRT stations – is located in an exclusive enclave of private residential apartments and landed housing estates in prime District 10. The 17-storey City Towers comprises 77 units of apartments and maisonettes, a penthouse unit and a shop unit. It has a land area of 9,711.3 square metres (approximately 104,531 sq ft), with a proposed total Gross Floor Area of 20,393.7 sq m (approximately 219,516 sq ft).
Prestigious schools near City Towers include Anglo-Chinese School (Barker Road), Singapore Chinese Girls’ School and St. Joseph’s Institution. Amenities including restaurants at Balmoral Plaza are also within easy reach, while the glitzy malls in Orchard Road as well as the Singapore Botanic Gardens, a UNESCO World Heritage site, are a short drive away.
City Towers sits on a regular land plot that spans 9,711.3 square metres (approximately 104,531 sq ft) with a 65-metre frontage to Bukit Timah Road. It is zoned ‘Residential’ and has a Gross Plot Ratio of 2.1 under the Master Plan 2014. Subject to relevant approvals from the authorities, the site can potentially be redeveloped to a 24-storey apartment block offering about 190 new homes – at an average size of 1,098 sq ft – on the proposed total Gross Floor Area of 20,393.7 sq m (approximately 219,516 sq ft).
The City Towers site, which is surrounded by some mid-rise apartment buildings and landed housing, also allows the successful tenderer to develop homes with panoramic city views and greenery views of the Central Catchment Area.
Mr Paul Ho, chief mortgage officer of iCompareLoan, commenting on en bloc sale said: “City Towers en bloc sale was concluded before the Government introduced a new round of property cooling measures in July last year. The once vibrant en bloc sale market is now also silenced by the release of several sites under the Government Land Sales programme.”
He added, “Developers prefer to buy land from the Government Land Sales Programme rather than bidding for collective sales sites.”
Any en bloc sale should be concluded with minimal delay and maximum benefit to the owners. Collective sale process takes 20 to 30 months to complete and during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
One way is to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
The rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
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Mr Ho said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
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