Mandarin Gardens and now Laguna Park. If both condominium developments manage to make successful en bloc sales, the east side might be looking at thousands of new private property units in a few year’s time.
$1.48 billion reserve price for Laguna Park
Laguna Park is now ready to make their third attempt at the en bloc sale process with a reserve price of $1.48 billion. This adds on to the number of mega-sites which are or will be trying to make their way into the collective sale market.
The 99-year leasehold site has 58 years left on its lease and has reached an 80% mandate ahead of its Sept 30 deadline.
Laguna Park currently holds 528 units and is launching their tender on Sept 18. They had previously made and failed at 2 other attempts in 2007 and 2010 due to poor market conditions and the global financial crisis. This time round, the new property cooling measures announced seemed to have gotten ahead of them as well.
But could it be third-time lucky for the owners of this former HUDC estate?
The new round of curbs saw an increase in developer charges for sites whose use need to be enhanced or on which larger developments need to be built. The head of the collective sales committee at Laguna Park, Mr Tony Sum, has said that they are thankful the charge rate increase does not apply for them thus developers who wish to bid for the site will not be hit with additional land costs.
Former HUDC site could yield 1,700 new units
Some homeowners at Laguna Park are finally willing to sign on the dotted line this time round as the number of years left on the lease diminishes.
Their recognition of the need to renew the land and the rising cost of maintenance have pushed them to agree to the en bloc sale. Should the sale go through, each owner could receive between $2.6 million to $5 million.
While there are no plans yet to try lowering the asking price to entice developers, Mr Sum has said that they will “cross the bridge when they get to it.” The market for mega-sites, however, is not entirely ideal for now.
As of June, there were 21 collective sale tenders valued at $5.6 billion which closed without making a sale. Perhaps reeling slightly from July’s new restrictions, developers are holding back slightly to fully re-evaluate potential risks. Will they come back stronger once the waves subside?