Monday, June 7, 2010

Meng Garden back on the market

Guide price of $135m is below previous attempt in 2007

MENG Garden Apartments off Killiney Road is back on the market, this time with a lower price tag than when it was previously offered in July 2007 and with 100 per cent consent from the owners.

What this means is that Meng Garden's buyer will be spared the hassle of going to the Strata Titles Board for approval of the collective sale of the freehold property, which has a land area of 35,639 square feet. It is zoned for residential use with a 2.8 plot ratio and height control of 10 storeys. The site could potentially accommodate a new development with about 95 apartments averaging 1,000 sq ft.

The latest 'guide price' of $135 million works out to about $1,360 per square foot of potential gross floor area inclusive of an estimated $681,000 development charge (DC). This unit land price is 8.6 per cent below the 2007 asking price of $1,488 psf per plot ratio (psf ppr) including prevailing DC at the time. Back then, the property was being marketed through an expression of interest exercise as the requisite majority 80 per cent consent level from owners had yet to be secured.

This time, however, marketing agent CB Richard Ellis - which had also handled the 2007 attempt - has clinched the approval of all Meng Garden's owners. The existing eight-storey block comprises 26 apartments and a penthouse; over half of the units are owned by an extended Lim family.

Meng Garden, located on Lloyd Road, was built in the mid-1980s. Prior to its development, the site was the original residence of the Alkaff family, according to an earlier report.

In the fourth quarter last year, the Mitre Hotel site at Killiney Road, which is behind Meng Garden, was sold for slightly above $121 million or nearly $1,100 psf ppr including DC.

Based on Meng Garden's guide price of $1,360 psf ppr, the breakeven cost for a new apartment project would be around $1,900-2,000 psf, say market watchers.

The tender for Meng Garden closes on July 7.

Jeremy Lake, CBRE executive director of investment properties, says that several local and overseas developers have been monitoring the site closely. 'The site enjoys the convenience and vibrancy of the Killiney Road neighbourhood, yet is within quiet surroundings. Somerset MRT Station is a short walk away and the Somerset area has been recently rejuvenated with the opening of new malls like Orchard Central and 313@ Somerset. There is also minimal DC exposure on this site.'

Source: Business Times, 7 Jun 2010

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