Monday, October 31, 2011

Enbloc News: Laguna Park (again) and Henry Park Apartments

Laguna Park at Marine Parade Road is up for collective sale with a reserve price of $1.25 billion.

Together with Henry Park Apartments, which is also up for collective sale at between $170 million and $180 million, the total value of properties that have come up for sale in October has hit close to $5 billion.

With over 10 sites now available for sale, developers appear to be spoilt for choice.

Nicholas Wong, Executive Director (Investment) at Knight Frank, said that developers are looking at collective sales with some caution now and added that any sale will depend on the attributes of the site and the developer's risk appetite as well as market sentiment.

He also noted that the Government Land Sales Programme is offering developers many alternative sites.

Knight Frank is marketing the 677,493sqft Laguna Park site and it believes the proximity to the seafront would a key selling point for any new development. Based on the reserve price, the land price comes to about $954psf ppr.

Laguna Park was put up for sale earlier this year with a reserve price of $1.33 billion. But the tender closed without a successful bid.

While the downward revision of the reserve price suggests that sellers might be more motivated to sell now, Mr Wong said that new requirements for en bloc sales allow a development to be put up for sale for one year only after receiving 80% approval from homeowners. When this lapses, sellers have to seek a new mandate. So some sellers choose to relaunch the site for sale within the year instead, added Mr Wong.

Tan Hong Boon, Deputy Director, Credo Real Estate, pointed out that no collective sale has been transacted at over $200 million yet. "Generally, the key will be the land price and quantum," he said.

Credo is marketing the 99,000sqft Henry Park site. Based on its asking price, the land price works out to be $1,216 - $1,287psf ppr.

Still, Mr Tan does not believe that the slew of collective sale sites will mean land prices will fall. "Some sellers may have lowered their asking prices but their reserve price has stayed the same," he added.

Mr Wong is still positive on the Singapore property market too. "Barring the worsening in the global economic situation, the property market here should remain stable," he said.

The tender for Laguna Park will close on December 6, while the tender for Henry Park closes on December 1.
Source: Channel News Asia


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