Mandarin Gardens has just raised its asking price once more to $2.927 billion. Should the deal go through, it will break records as the highest dollar-terms transaction here.
Mega sites harder to sell due to higher land acquisition costs
The Siglap road condominium first revised its asking price up from $2.479 billion to $2.788 billion last November after the land parcel was found to be undervalued.
Now, just one month before the expiration date of its collective sales agreement (CSA), the reserve price has been raised once more in a bid to secure a 80% mandate required to launch a tender.
Analysts are however wary about the collective sale success of high-value mega sites in the current market climate as land acquisition costs are significantly higher following last year’s cooling measures.
Dairy Farm estate, another mega site, also raised its reserve price from $1.688 billion to $1.84 billion. Though its CSA expires on April 6, only 71% consensus has been received as of March 9.
At the 1,017-unit Mandarin Gardens, the new proposed reserve price has only garnered 67% consensus thus far.
Should the 80% consensus be achieved by March 24, they will have 12 months to find a buyer for their land. With the new asking price, the adjusted total land cost is now $1,250 psf ppr, up from $1,191 psf ppr.
More en bloc tenders close without a successful sale
This year saw more en bloc tenders closing without a sale as developers’ appetite for residential properties wanes. Many establishments have lowered their asking prices in a bid to attract interest from buyers.
Spanish Village in District 10, for example, lowered its price from $882 million to $828 million. The tender closed on March 11. Others such as Grange Heights in district 9, have entered into private treaty negotiations.
Could commercial sites be more attractive to developers with the growth of demand for office spaces?
The $800 million collective sale tender for Golden Mile Complex closed on January 30 though it is still unknown if there were any successful bids. Katong Plaza launched for sale just last week with an asking price of $188 million.
The owners have however seeked approval from the Urban Redevelopment Authority (URA) for a change of use to potentially develop it into a hotel.