Home owners at the Laguna Park condominium in Marine Parade are now faced with the choice of selling their homes at an average of 20 per cent lower than their initial asking price.
This comes after a failed tender earlier this month.
Then, the site received a bid from an Indonesian-owned, locally incorporated company of S$1.728 billion, but a downpayment could not be made in time.
Since then, the collective sale committee has circulated a letter informing owners of a new potential selling price of S$967 million.
Under en bloc sale regulations, 80 per cent of owners need to vote in favour of this price tag before the sale can proceed.
When Laguna Park opened for tender in September, most owners stood to gain around S$2.1 million to S$2.3 million each. Penthouse owners would have gotten between S$3.5 million and S$4.1 million each.
But at the new price being considered now, owners will get almost 20 per cent less or about S$1.8 million.
Some analysts said this price might be too low to be attractive to sellers. But they said sellers need to take into consideration some of the less positive aspects of the property.
Nicholas Mak, property consultant, said: “They must be aware that this is an ageing development and the lease of 99 years has been run down significantly.”
He added that sellers who are planning to buy similar properties that also have a view of the sea will probably have to pay as much as SS$2 million.
And he expects most owners to have to have to downgrade from their older, but more spacious units, to smaller new homes.
Charges to top up the lease to a 99-year term and to increase the site’s plot ratio comes up to about S$440 million.
Earlier, buyers would have been looking at paying around S$850 per square foot per plot ratio – a price many analysts considered expensive.
At the new prices, the cost comes down to S$700 per square foot per plot ratio for the 528-unit leasehold Marine Parade project.
Property consultancy Colliers said S$967 million is a more realistic selling price, and could lead to some developers re-considering the tender.
However, many analysts also noted that the total price is still very hefty for any one local developer in today’s market.
Laguna Park has a land area of 677,463 square feet, which means about 1,500 apartments can be built on the site.
According to the development’s marketing agent Credo, the sales committee has until around mid-November to strike a deal with a buyer, before the collective sale agreement expires on December 19.
Source: Channel News Asia, 26 Oct 2009