Raintree Gardens may be up for collective sale
The collective sale attempt of Raintree Gardens follows the $638 million sale of Shunfu Ville (pictured) in May.
Owners of a privatised former HUDC estate have secured the minimum consent level to put the 175-unit property up for en bloc sale, reported The Straits Times.
With just over 70 years left on the lease, Raintree Gardens is located near Potong Pasir MRT station and next to the Kallang River. The 201,405 sq ft site is zoned residential with a plot ratio of 2.8. It was privatised in July 2014.
Market experts said the owners could get more than $315 million, or around $1.8 million per unit.
Taking into account the amount a developer would have to pay the government to top up the lease and build a bigger project, the price could stand at around $430 million, or $761 psf per plot ratio.
A first for the estate, the collective sale attempt follows the $638 million sale of Bishan’s Shunfu Ville in May.
“While there has been one substantial en bloc sale, Shunfu Ville, one sale doesn’t really make a market,” said Christina Sim, Director of Investment Sales at Cushman & Wakefield.
“That said, there are not many good plots in the market right now, and there is still room for more projects in Potong Pasir. It is an up-and-coming area, and most of the new developments there sell well.”
MCC Land, for instance, moved 74 percent of the 731 units at nearby The Poiz Residences.
Going by the bullish bids at recent Government Land Sales (GLS) tenders like the Martin Place site, Sim said there is still demand for plum residential sites, although the price must be right.
The Raintree Gardens site is within easy access to the city as it is within walking distance to the MRT station. Another selling point is the site’s proximity to the Bidadari estate, which is set to boast a 10ha park with the Alkaff Lake.
Raintree Gardens is also near St Andrew’s Village, which houses not only a primary and secondary school, but also a junior college.
Lee Liat Yeang, Senior Partner at Dentons Rodyk & Davidson, noted that while industry experts receive many requests to assess potential collective sale sites, it is a tough balance to correctly price sites.
“It will not be easy to sell an en bloc site if it is priced too adventurously for a developer. But if owners don’t price more aggressively, they may not be able to get the 80 percent minimum consent level for the sale,” he said.
He revealed that developers seeking collective sale sites should also take into account the longer pre-construction period. Upon acquiring the site, a developer should first apply to the Strata Titles Board, seek the High Court’s guidance if needed, and allow residents to stay at the property rent-free for six months prior to starting redevelopment.
“All these eat into a developer’s schedule and must be factored in when he prices the land,” added Lee.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
