May 24, 2011
If successful, it will be Singapore's second-largest collective sale
FORMER Housing and Urban Development Company (HUDC) estate Laguna Park is set to become Singapore's second-largest collective sale, if a developer is willing to pay the $1.33 billion asking price.
The sale tender for the huge site on Marine Parade Road, with commanding sea views, was launched yesterday by marketing agent Knight Frank.
The record for a collective sale is held by Farrer Court, another former HUDC estate, which sold for $1.34 billion in 2007. This worked out to about $762 to $783 per sq ft per plot ratio (psf ppr) for the 838,488 sq ft plot.
Laguna Park comprises 516 residential apartments and 12 commercial units on a somewhat smaller 677,493 sq ft site. This means the price psf ppr for the asking price is quite a bit higher at $975.
The asking price includes about $250 million to top up the 99-year lease and a development charge of almost $269 million to enhance the property's use.
Laguna Park was previously put up for sale at $1.2 billion in 2009. A possible sale fell through as the sales committee ran out of time trying to get the minimum consent level from owners for a lower price.
If the latest bid comes off, residents of the 34-year-old condo each stand to receive between $2.35 million for a 1,453 sq ft apartment and $4.5 million for a 3,369 sq ft penthouse unit.
Last month, new homes in nearby development Silversea hit an average selling price of $1,726 psf. Units in another nearby project Cote D'Azur averaged a selling price of $1,094 psf during the same period.
All 12 of Laguna Park's commercial units are 1,636 sq ft and are owned by the HDB, which stands to receive a total of $22.2 million from the development's sale.
Knight Frank says the development, with a plot ratio of 2.8, is a 'rare and sizeable' plot of land with a more than 300m span of sea frontage.
Knight Frank chairman Tan Tiong Cheng said: 'The proposed new development will enjoy breathtaking sea views, a dramatic city skyline and lush surroundings, all within visual range.'
The site is located near well-established schools such as Tao Nan School, Victoria Junior Collage and St Patrick's School. Recreational facilities such as those at East Coast Park are within walking distance.
Plans are in place to build an Eastern Region MRT Line to link residential estates in the east such as Tanjong Rhu, Marine Parade and Upper East Coast to the Marina Bay area.
Laguna Park joins the list of mega collective sale sites that have come up for sale in recent months. Many including Tulip Garden and Hawaii Tower have failed to sell.
Launched in March, the $1.7 billion tender for Pine Grove condominium in Ulu Pandan closed last month.
Marketing agents for the 893,219 sq ft site say they are in discussion with some parties. Under collective sale rules, a 10-week period is allowed after the tender closes for private treaties to be ironed out. Pine Grove's 10-week period ends on June 27.
Laguna Park may find it difficult to buck the trend of attempted sales that fail, say market observers.
Dr Chua Yang Liang, head of research at Jones Lang LaSalle, said an anticipated oversupply of residential units set to hit the market over the next few years may have led developers to take a more cautious approach.
Buying such a big site would mean taking on a bigger risk, said Dr Chua. 'It's more likely that the bigger property developers might take part in this tender. But I don't rule out smaller developers or even foreign property players coming together through joint ventures to make a bid for the land.'
Source: Straits Times News by Cheryl Lim
