Consent level reached in Dec, but now's the right time for tender, it says
EAST Coast condominium Laguna Park was put up for collective sale yesterday with a hefty price tag of $1.2billion - potentially the second highest price ever here for such a deal.
The sprawling 30-year-old condominium has been in the headlines over a spate of vandalism attacks on residents who were not keen on the sale.
Despite its troubles, the estate attained the crucial 80per cent consent level from its owners last December.
But the tender exercise was put on hold until now 'as major developers have only recently returned to the land market with confidence', said its marketing agent Credo Real Estate.
If it succeeds in finding a buyer, Laguna Park will be the second billion-dollar en bloc deal here, after the 618-unit Farrer Court was sold to a CapitaLand-led consortium for $1.34billion in 2007.
Laguna's entry on the market marks a milestone in the estate's troubled path towards a collective sale that was made highly public due to incidents of vandalism which hit the estate last year.
Residents who spoke to The Straits Times yesterday said the estate's once-peaceful atmosphere has begun to return.
One resident, Mr Robin Sng, who had his car damaged by a corrosive liquid, says he has still not signed up to the deal because he wants to stay on.
Even with the payout, he feels it will be difficult to get a replacement unit with the same attributes in the area.
'Very few people now talk about the en bloc sale openly, although we know it is going on,' he said.
Another minority owner, who declined to be named, said he was adopting a wait-and-see approach to the sale, but confirmed that some owners - who themselves were victims of vandalism - had changed their minds and signed up after considering the attractive price tag.
At the current price, most owners will receive $2.1million to $2.3million, while the penthouses will fetch between $3.5million and $4.1million, said Credo.
This price, which works out to about $1,300 to 1,400 psf depending on the unit size, is double the price such units have been fetching in recent months - about $682 psf- even in the bullish market.
Industry analysts are speculating that the overall price tag - at $1.6billion, including an estimated $400 million payable to the Government for development charges and a fresh top-up of the lease - might deter developers.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak notes that the steep sum may lead to interested developers forming joint ventures.
On the timing of the sale, he said this time is 'as good as any to launch, as developers are triggering government land sales sites and 99-year leasehold condominiums seem to be selling out'.
Like Farrer Court, Laguna Park is a former HUDC estate; it is located in Marine Parade and was privatised in 2007. The condominium has a land area of about 677,493 sq ft and a gross plot ratio of 2.8.
Credo deputy managing director Tan Hong Boon estimates that the buyer could build about 1,500 new apartments with an average size of about 1,200 sq ft.
The land price for the condominium, which has 67 years left on its lease, works out to about $844 per sq ft per plot ratio, including the $400million payable.
At this price, the successful purchaser could break even at about $1,200 to $1,250 psf, with a view of pricing the new units at $1,400 to $1,600 psf, said Mr Tan.
Chesterton Suntec International's research and consultancy director Colin Tan said the condominium sits on an attractive site that faces the sea, but 'it remains to be seen if it can achieve that kind of pricing'.
The tender closes on Oct13 at 3pm.
Source, Straits Times 3 Sep 2009