Will Laguna Park owners settle for less?

They mull selling units at $1 billion, but some want to wait for market pick-up

When they put their sea-facing estate up for collective sale early last month, with the economy barely on the track to recovery, the $1.2 billion reserve price raised eyebrows.

Now with their bid having failed, owners of units at Laguna Park are adjusting their expectations and considering selling at a lower price.

The new target: Reportedly between $950 million and $1 billion.

The development’s marketing agent Credo Real Estate said residents are likely to receive letters advising them on the situation in two or three days.

The revised price, however, is still a “sizeable amount”, felt ERA Asia-Pacific associate director Eugene Lim.

“It’s not a price people would scramble for. It might interest developers who were not previously interested in the sale … but there aren’t too many developers here with big appetites,” he said.

“Some might just wait and see, and the owners may have to adjust their price downwards again.”

After the tender closed unsuccessfully on Tuesday – despite two bids made, no buyer put down a payment to seal the deal that would have seen most owners net between $2.1 million and $2.3 million each – residents met yesterday afternoon for more than two hours, to discuss the fate of their 30-year-old leasehold estate in Marine Parade.

One woman who declined to be named told MediaCorp: “It was obvious there were two camps at the meeting. One camp was a group of people who were pretty desperate to sell, and another camp felt we should just wait as we’re sitting on a very nice property here, and it should not go for less than what we’ve decided on.”

It remains to be seen whether the sale committee can garner the 80-per-cent consent level required from the 528 units. It has till Dec 19 to close a private treaty deal before the collective sale agreement expires; if there is no deal by then, the entire collective sale process will have to be restarted from scratch.

One male resident felt the sale committee was trying to “get people worked up since there are only six to eight weeks left, to lower their price, get 80 per cent, then go for a closed tender. To me that’s totally wrong. I don’t want a closed tender, especially at this amount”.

At the close of the tender on Tuesday, Credo said one local company whose major shareholders are in Indonesia had offered $1.728 billion; but it pulled out on Thursday as it could not get funding for the bid.

A second expression of interest was from a local developer who was not willing to meet the reserve price. MediaCorp understands the developer is expected to further negotiate with the majority owners before settling on a firm price.

The biggest collective sale to date remains the 618-unit Farrer Court which sold for $1.3388 billion in mid-2007.

Source : Today – 19 Oct 2009