Entities related to developers Kingsford Group and MCC Singapore have increased their offer for the Chuan Park leasehold condominium from S$860 million in an Expression of Interest (EOI) in June to about S$890 million.
Anjia SG has learned that the collective sale committee for the 446-unit Chuan Park condominium, located at Lorong Chuan, signed a sale and purchase agreement last week.
This offer is below its S$938 million reserve price. When contacted yesterday, representatives for the developers declined to comment.
This could be the largest collective sale since Tulip Garden on Farrer Road was sold for S$906.9 million in January 2019.
The transaction amount also surpasses the S$815 million sale of two freehold residential plots on Thiam Siew Avenue to a joint venture between Hoi Hup Realty and Sunway Developments last November.
Sources say that as of the end of last month, Kingsford had sold all 1,862 units at Normanton Park—in just 18 months since its launch last January—so the developer is in great need of land.
Kingsford Huray Development acquired the former Normanton Park, a former government housing project, for S$830.1 million through a collective sale in 2017.
The main contractor for the new project is MCC Singapore, a subsidiary of the China Metallurgical Group Corporation (or MCC Group).
The project is scheduled for completion by the end of next year.
Leo Kwek, a senior real estate agent at Anjia SG, said the S$890 million bid “reflects the developers’ confidence and ability to sell out within five years.”
Anjia SG understands that the developers’ identity has not yet been disclosed to most condominium owners, but a meeting will be held next Monday (July 25) at 7:30 PM.
According to a letter to Chuan Park owners dated July 13 and seen by Anjia SG, the collective sale committee will provide the latest “proportion of owners (by strata area and share value) who have signed the supplemental joint agreement to amend the reserve price to S$890 million.”
The collective sale committee will also provide information on the events leading to this sale price, the expected timeline for the sale, and the terms and conditions of the sale and purchase agreement.
It is currently unclear what the owners’ proceeds will be after the transaction price was revised to S$890 million. ERA, the real estate consultancy marketing the project, declined to comment on the sale.
It was previously reported that based on the S$860 million EOI offer, owners of 710 sq ft residential units would receive S$1.12 million, while owners of 2,045 sq ft units would get about S$2.45 million. For commercial units, owners of 474 sq ft units could receive about S$1.05 million, and about S$1.94 million for 1,238 sq ft units.
Chuan Park was relaunched for tender in March at a reserve price of S$938 million and entered into private treaty negotiations with potential buyers after the tender closed on April 26.
Prior to this, Chuan Park had been put up for tender from October 5 to November 18 last year, just before the latest round of property cooling measures was introduced in December.
At the reserve price of S$938 million, which includes an upgrading premium of S$192.62 million with no development charge payable, the land rate translates to S$1,256 per square foot per plot ratio (psf ppr).
The site has an area of 37,216 square meters and a gross plot ratio of 2.1, allowing for a proposed Gross Floor Area of up to 78,153 square meters.
Located near Lorong Chuan MRT station, the site can be redeveloped into 900 units.
According to data from Cushman & Wakefield, eight residential developments have been sold collectively from January until yesterday, for a total of S$1.38 billion. In comparison, four deals in the first seven months of last year totaled only S$93 million.
So far this year, the value of residential collective sales has also surpassed the S$1.177 billion recorded for the whole of last year.
Mr. Kwek said that developers remain keen to replenish their land bank, given the low unsold inventory in the housing market and rising home prices and rents.
“However, a balance must be struck against rising development costs and risks due to inflation and interest rate hikes,” he said.
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