Owners have until Dec 19 to agree to 19-per-cent lower price
Home owners at the Laguna Park condominium in Marine Parade (picture) are now faced with the choice of selling their homes at about 19 per cent lower than their initial asking price.
The collective sales committee of Laguna Park has circulated a letter informing owners of a new selling price of $967 million.
This comes after the failed tender earlier this month, at a price tag of $1.2 billion. The sea-facing site had received a bid of $1.73 billion from an Indonesian-owned, locally-incorporated company, but a downpayment could not be made in time.
Laguna Park homeowners now have until this Saturday to indicate if they accept the deal. Under en bloc sale regulations, 80 per cent of owners need to vote in favour of this price tag. They have until Dec 19 before the collective sale agreement expires.
The new price tag would mean that the home owners stand to gain about $1.8 million for a typical unit instead of the previous $2.1 million to $2.3 million range based on the original reserve price of $1.2 billion.
Including development costs of up to $440 million, Laguna Park’s new price tag works out to about $700 per square foot per plot ratio (ppr), compared to the previous $844 psf ppr.
The former HUDC project has 528-units and sits on a massive land area of 677,493 sq ft.
Analysts said that the new asking price looks more realistic now, but they reckoned that the homeowners may not be willing to accept the deal because the price may be too low.
Colliers International’s Director for Research and Advisory Tay Huey Ting said that the reduced asking price is “definitely more realistic”but she said that “the total sum is still a hefty amount, especially when you include development costs.”
Cushman and Wakefield’s managing director Donald Han pointed out that there has been no transaction worth more than $300 million since the global financial crisis. He added that any potential buyer for this site would likely be a consortium where “the risk of such a huge project can be spread among a few developers”.
Meanwhile, two residents MediaCorp spoke to said that the new price is too low for them and said that they do not intend to accept the offer.
“The sales committee is making a mistake going for the second round, but having said that, I don’t think they’ll achieve the 80 per cent required for the sale to go through,” said one resident, who declined to be named.
Another resident said the price difference of about $400,000 is too big and he, along with “many others”, are willing and prepared to wait for another offer even if it takes one to two years.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said a seller pocketing $1.8 million would not be able to buy an apartment of the “same size and space”, especially in the the East Coast area.
While he expects a “heated debate” from owners on the decision to go ahead with the sale, he added that the potential buyer should also consider the “less positive aspects” of the property.
“They must be aware that this is an ageing development and the lease of 99 years has been run down significantly,” he said.
Source : Today : 27 Oct 2009
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