Normanton Park Makes 2nd Attempt at En Bloc Sale
Having failed in their previous attempt in 2015, owners at the former HUDC, now privatised Normanton Park, are hoping to strike it lucky in a second collective sale bid. This time they have set a reserve price of SGD$800 million for the 488 unit estate located between Science Park and Kent Ridge Park.
And in order to quickly ride the current rising tide of en bloc sales, the owners have mounted a military-style campaign to put their project onto the market within an extraordinarily short time.
“It took a mere 11 days for us to reach the 80 per cent consensus and a further two weeks to launch the tender today,” noted the sale committee chairman, Mr Chopra, who also happens to be a retired navy colonel.
He added that, “This very quick and short duration… was achieved through the enthusiasm of owners and great collaboration between the marketing agent, lawyers and sale committee.”
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Possibility of High Bid
Over 80% of the Normanton Park owners, known as subsidiary proprietors, approved the CSA (Collective Sales Agreement) within a record time of two weeks. The tender, based on a minimum collective sale price of $800 million, will close on 5 October 2017.
If it goes through, it will be one of the highest reserve prices, after Tampines Court, another privatised HUDC estate. Tampines Court has apparently received a top bid of SGD$970 million, subject to certain conditions. However it is not official yet.
So far there have been seven successful collective en bloc sales this year, totalling SGD$2.5 billion, as opposed to just three worth a total of around $1 billion for the whole of 2016.
If Normanton Park achieves its reserve price, each unit owner could get somewhere between SGD$1.6 to $1.8 million. This works out to a land cost of $898 PSF PPR (per square foot per plot ratio), after adding a differential premium of around $225.3 million for intensification of use of the site. It also includes a premium of $220.6 million to top up to a fresh 99 year lease.
The head of research and consultancy for the ZACD Group, Mr Nicholas Mak, said that it would be interesting to see whether bidding would go higher than the reserve price of $800 million.
He noted that, “There’s a possibility that bids could be higher than $800 million. $898 PSF PPR is near the high end of the range for land prices in that location. In today’s market, there may be some developers who are willing to pay even higher than reserve price in order to secure attractive sites to replenish their land bank. But as more collective-sale developments come to market, there will also be more land available to satisfy their hunger.”
Mr Ian Loh of Knight Frank Singapore, the exclusive marketing agent, observed that there hasn’t been any new high-rise housing launch in the past 15 years within 1.5km radius of this site. So there is little new supply in the vicinity.
Mr Loh, who is also Knight Frank’s executive director & head of investment and capital markets, added that, “The new high-rise development could potentially comprise more than 1,200 new residential units of 100 sq m on the site, and home owners should be able to enjoy lush greenery and unblocked views. As such, we expect… strong interest.”
Normanton Park is but one of a number of developments hoping to capitalise on what industry analysts see as the early stages of a collective sale fever. This wave began after adjustments to the property cooling measures lifted buying sentiment, and amidst the scaling down of the GLS (Government Land Sales) sites offered for the second half of this year.
For related information, see article on Normanton Park’s first en bloc attempt.
Source: The Straits Times . 22 August 2017
