It was announced on 5 October 2017 that the former HUDC Normanton Park site at Kent Ridge has been successfully sold, in one of the biggest collective en bloc sales in Singapore.
Kingsford Huray Development, a China developer, clinched the deal at a price of SGD$830.1 million. This is more than $30 million over the $800 million reserve price.
It also works out to the highest cost per square foot per plot ratio (PSF PPR), or land rate, for a 99 year leasehold en bloc land parcel this year.
This old HUDC estate covers a land area of 61,408.9 square metres or around 660,999 square feet, and comprises 488 apartments in 13 blocks. It was built in the 1970’s to house SAF (Singapore Armed Forces) personnel. Among its attractions are its location close to parks and nature reserves, proximity to Science Park and One-north (where One-north Eden will be its main competitor), as well as views to the sea off the west coast.
Each apartment owner at Normanton Park is expected to receive between SGD$1.68 million to $1.86 million, provided certain requirements are met.
Size of Deal Changing Perceptions
The huge size of the site and quantum involved is seen as a game changer for big sites in the local property market.
Head of research for Edmund Tie & Company, Dr Lee Nai Jia, pointed out that, “This sale changes the assumption that there may not be appetite among developers for the big sites.”
He further commented, “Now, even the bigger sites are attracting developers, especially if there is big redevelopment potential. And this site has merits. It is close to the Buona Vista growth story.”
On top of their winning tender price, the developer will have to pay an estimated additional SGD$231.1 million, to top the lease back up to 99 years.
They will also have to pay another charge of around SGD$283.4 million, in order to develop the site to its maximum plot ratio of 2.1. This will give them a total gross floor area of close to 1.39 million square feet.
After taking all these into consideration, the land rate rises to around $969 PSF PPR. According to analysts, the breakeven could then be in the region of $1,500 PSF. (Which incidentally, is very close to the estimated break even of $1,500 to $1,550 PSF for One north Eden as well.)
According to the head of investment and capital markets at Knight Frank, Mr Ian Loh, “The gross development value for this project is estimated at $2.23 billion. The new high-rise development could potentially house more than 1,200 new residential units of 100 sq m.”
The Normanton Park Site Tender
The chairman of the Normanton Park sale committee, Mr Sukhvinder Chopra, said that they received several bids for the tender, and “… deliberated all submissions carefully and the decision to award to Kingsford was unanimous.”
He highlighted that, “The sale is subject to government approval of the outline planning permission and the lease top-up.”
The collective sale movement here garnered good support from Normanton Park owners. Over 80% of them gave their consent in less 12 days from the collection of the first signature.
The public tender for it was called on 22 August 2017 with a reserve price of SGD$800 million, and closed on 5 October 2017.
See report for further reading on Kingsford Huray bagging this site.
Source: The Straits Times . 6 October 2017