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Laguna Park not for sale – at least for now

Posted on 19 Nov 2009 | Comments Off

THE Laguna Park sales committee has voted to call off the faltering collective sale of their Marine Parade condo, after an initial bid failed.

The on-off sale would have been one of the largest here, with an asking price of around $1 billion. But lukewarm response from developers and a fast-approaching deadline for a sale to be completed sealed its fate – for now.

Mr Karamjit Singh, managing director of Credo Real Estate, told The Straits Times that the Laguna Park sales committee decided to let the collective sales agreement (CSA) expire next month: ‘To get the 80 per cent takes time, and because it’s a very big development, there was not the luxury of time.’

Last month, owners in the East Coast estate failed to sell the property en bloc for $1.2 billion through a tender process. They were considering a lower price of between $950 million and $1 billion, below the $1.2 billion reserve price which would require them to get an 80 per cent vote of approval from owners.

The impending expiry of the CSA left them with little time to get the required signatures. The committee thus decided that instead of pursuing the more than 400 signatures needed, it would be better to start afresh with a new CSA next year, giving them a full 12 months to pursue another sale, Mr Singh said.

Though there had been talks with a potential buyer, nothing came of them, given the sales committee’s decision not to pursue the signatures.

It is still too early to say when a new sales committee will be nominated, but Mr Singh says it will be next year.

Owners had not been officially informed of the development when The Straits Times called yesterday, but one who was against the sale and declined to be named was relieved: ‘It’s a wise move because of the present market situation. One year later, the property market might be picking up again and we would be more justified to sell.’

The Laguna Park sale has been surrounded by drama from the word go. The development obtained the 80 per cent approval from the 500 or so owners late last year, but the $1.2 billion price was decided late 2007.

There was still a vocal minority strongly opposed to a sale, and incidents of vandalism occurred at the condo protesting the deal.

Laguna is a former HUDC estate with a land area of about 677,493 sq ft and a gross plot ratio of 2.8.

If the sale of the 528-unit leasehold project had come off, it would have only been the second en bloc deal this year. The first was the smaller Dragon Mansion in Spottiswoode Park Road, which eventually sold for $100.8 million last month despite asking for $120 million.

Source : Straits Times – 19 Nov 2009

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Tagged Collective Sales, Enbloc, Laguna Park, Laguna Park Enbloc

Laguna Park en bloc sale called off

Posted on 19 Nov 2009 | Comments Off

Over at Meyer Place, owners to start inking deal soon to lower reserve price

The en bloc sale of Laguna Park has been called off for now as the sales committee found it a race against time to get the minimum consent level from owners at a proposed lower price – said to be $967 million or $704 psf per plot ratio, down from the original $1.2 billion or $844 psf ppr reserve price – before the Collective Sale Agreement (CSA) expires next month.

But over at Meyer Place, owners will soon begin signing a supplemental agreement to their original CSA at a lower price of $59 million, down from the original $65 million. BT understands the sales committee is expected to sign an agreement soon for the freehold property’s sale to a joint venture involving property and construction companies – subject to securing at least 80 per cent consent from owners at the lower price.

Meyer Place’s CSA expires around mid-March 2010.

‘The tender for Meyer Place closed on Oct 28 with four expressions of interest received and we are now negotiating with one of these parties,’ says Christina Sim, director, investment, capital markets at Cushman and Wakefield, the marketing agent for the property.

The lower proposed reserve price of $59 million works out to $1,048 psf ppr including an estimated $3 million development charge (DC), down about 9 per cent from the $1,150 psf ppr based on the original $65 million reserve price.

Based on the revised price, the breakeven cost for a new development on the site could be $1,550 to $1,600 psf.

Laguna Park’s sales committee decided to call off the estate’s en bloc sale last week. ‘While it did begin the process of getting owners to sign a supplemental agreement to lower the reserve price, the committee felt it was a race against time as the existing CSA expires next month,’ said Karamjit Singh, managing director of Credo Real Estate, the marketing agent for the property.

Laguna Park comprises 528 units.

‘It would probably be better if owners begin a fresh en bloc initiative next year and sign a fresh CSA which will give them a new 12-month period to find buyers,’ Mr Singh said.

Laguna Park, which has a land area of 677,463 sq ft, failed to find a buyer after its tender closed last month. Although two bids were submitted, no buyer made the downpayment to seal the $1.2 billion deal at the time. Mr Singh said yesterday that although signing of a supplemental agreement at the lower price had started last month, so far no conditional agreement had been inked with any potential buyer for a sale at the lower price.

The unit land price of $704 psf ppr based on the revised $967 million price tag includes payment to the state to intensify the site’s use and top up its lease to a fresh 99-year term.

Meyer Place has a freehold land area of 28,167 sq ft and was completed in the early 1990s, comprising 28 apartments – 24 units in a 13-storey block and four in a conservation house.

The property is zoned for residential use with a 2.1 plot ratio – the ratio of maximum potential gross floor area to land area.

Although Meyer Place is a relatively new development, it has redevelopment potential as its plot ratio in the 2008 Master Plan has not been fully utilised. ‘The apartment block could be torn down and rebuilt into smaller units,’ said Cushman’s Ms Sim.

Market watchers point out that the buyer of Meyer Place could also seek to enlarge the plot by purchasing surrounding properties. Just in front of Meyer Place, at No. 40 Meyer Road, is a small apartment block with a site area of about 6,000 sq ft. There is also another plot behind Meyer Place housing two old bungalows at 18D and 18E Fort Road – adding up to more than 20,000 sq ft of land – that could potentially be purchased and amalgamated.

Last month, Roxy-Pacific signed an agreement to buy Dragon Mansion for $100.8 million or $863 psf ppr including DC – lower than the owners’ previous asking price of $120 million or $1,020 psf ppr. Signing by owners of a supplemental agreement to the original CSA at the revised price is still in progress. The majority owners have up to January next year to make an application for a collective sale to the Strata Titles Board.

Source : Business Times – 19 Nov 2009