Ravi Chandran
La Ville a high-rise freehold collective sale site was launched for tender in May this year at the asking price of S$152m and the tender closed on 19 June 2018 without a deal. During the ensuing private treaty period after tender, JLL, the exclusive marketing agent of the en bloc sale, continued with negotiations with interested parties, but was halted by the Government announcement of the latest round of residential market cooling measures on 5 July 2018.
The Collective Sale Committee (“CSC”) then initiated, in consultation with JLL and the lawyers from Dentons Rodyk, a proposal to the owners in an Extraordinary General Meeting (“EGM”) to lower the reserve price to S$140.6 million. This was duly approved at the EGM, and owners who are supportive of lowering the reserve price started signing a Supplemental Agreement (“SA”) for lowering the reserve price. This process requires owners representing at least 80 per cent by total share value and by total floor area to approve.
At this juncture, owners of the high-rise freehold collective sale site representing more than 70 per cent by total share value and by total floor area have executed the SA.
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Constructed in the 1980’s, the 40-unit development has a land area of about 47,012 sq ft. It is zoned “Residential” with an allowable gross plot ratio (GPR) of 2.1 under the 2014 Master Plan with height control subject to relevant authorities’ approval. We understand that the Pre-Application Feasibility Study (“PAFS”) on traffic impact is not required by LTA for redevelopment of this site.
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The development enjoys excellent conveniences and accessibility, with the upcoming Katong Park MRT Station on the Thomson-East Coast (TEL) line being just a mere estimated 250m walk away. The Central Business District and Changi Airport are just about 10 and 15 minutes’ drive away respectively via the East Coast Parkway. Katong Park and East Coast Park beach, both treasured urban getaways, are just a leisurely stroll away.
Additionally, the high-rise freehold collective sale site is in close proximity to a wide range of shopping and recreational amenities readily available at Kallang Wave Mall, Parkway Parade and a myriad of F&B choices at East Coast Road and Old Airport Road. Lifestyle offerings in the vicinity, such as Singapore Sports Hub and Gardens by the Bay, are a short drive away too.
At the reserve price of S$152 million, the unit land rate is S$1,540 per sq ft per plot ratio (psf/pr) or S$1,466 psf/pr after factoring in the 10 per cent bonus balcony.
At the lower proposed reserve price of S$140.6 million, the unit land rate of the high-rise freehold collective sale site is about S$1,424 psf/pr or S$1,361 psf/pr after factoring in the 10 per cent bonus balcony and a corresponding estimated development charge of about S$7.2 million.
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The high-rise freehold collective sale site, La Ville, in the Tanjong Rhu area is popular with families and young couples who treasure both the convenience and an active lifestyle with the Singapore Sports Hub, Singapore Indoor Stadium, Gardens by The Bay East, the East Coast Park and the many offerings around Kallang Basin and Marina Bay.
Located in District 15 at Tanjong Rhu, La Ville, completed in 1987, comprises 40 residential units – 36 apartments and 4 townhouses, nestled in a quiet neighbourhood. Under the 2014 Master Plan, the 47,012 sq ft freehold site is zoned ‘Residential’ with a GPR of 2.1. The redeveloped building height may be allowed up to 24 storeys, subject to technical height controls.
The tender for La Ville closes on Thursday, 8 November 2018, at 2.30 p.m.
Mr Paul Ho, chief mortgage consultant of iCompareLoan said owners of the high-rise freehold collective sale site need to act quickly and decisively.
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.
The earliest any home owners can receive any en bloc sales proceeds could be around 13.5 months and the latest will be 32.5 months.
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