Ravi Chandran
Century 21 today announced the launch of collective sale by tender of Kingsley Mansion, a Balestier freehold site. The freehold site comes to the market with a reserve price of $45.5 million. The tender will launch on Tuesday (Aug 14) and close at 3pm on Sept 13.
The reserve price for the 18-unit, 14,350 square foot condominium translates to a land rate of $1,132 per sq ft per plot ratio (psf ppr), with no development charge payable on its gross plot ratio of 2.8 times or the maximum permissible gross floor area of about 40,180 sq ft.
The reserve price for Kingsley Mansion is comparable to recent transactions of Kemaman Point at $1,173 psf ppr and Ampas Apartment at S$1,122 psf ppr.
Kemaman Point, an 89-unit residential development along Balestier Road, has been collectively sold for $143.88 million to Soilbuild Group Holdings after a trying collective sale process. Each owner of Balestier freehold site stands to receive $1.4 million to $2.32 million from the sale of the condominium.
For Kingsley Mansion, Century 21 said that if a 10 per cent bonus area from balconies is included, the land price will be reduced to about $1,086 psf ppr, inclusive of a $2.5 million development charge. No pre-application feasibility study is required for this Balestier freehold site. If the tender for the Balestier freehold site is successful, each owner could receive about $2.36 million to $2.57 million.
The Balestier freehold site, which is close to the Novena precinct, can be built up to 36 storeys and could yield about 53 apartments with an average size of 753 sq ft, marketing agent Century 21 said.
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Kingsley Mansion is conveniently located along Balestier Road, within walking distance to a wide array of amenities and is just a few minutes’ drive to both Novena Square and United Square, the Orchard Road shopping belt and the Central Business District. The development enjoys the views of landed houses along Boon Teck Road and is accessible by major roads including the Pan-Island Expressway (PIE) and Central Expressway (CTE).
The Balestier area is also currently undergoing rejuvenation with the opening of Zhongshan Mall, Ibis Singapore Novena and HealthCity Novena. The real estate market in that area also continues to see heightened interest for for boutique redevelopment sites with a Gross Development Value (GDV) of below S$100 million.
Such interests could indicate that despite recent government cooling measures, the price quantum for Balestier freehold site is still palatable.
Mr Paul Ho, chief mortgage consultant of icompareloan.com, said whatever decision owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners. One way he said was 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.
As collective sale process takes 20 to 30 months to complete, 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.
Mr Ho pointed out that 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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He 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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