After a period of suspense following the rejection of bids higher than the S$600 million reserve price provided by Florence Regency owners, Logan Property Holdings has finally purchased the property at S$629 million.
This purchase price matches the property valuation as given by Colliers International Consultancy & Valuation Singapore.
JLL, the marketing agent who handled the sale, confirmed that the property has successfully changed ownership, through a private agreement between the owners of Florence Regency and the Chinese developer’s subsidiary in Singapore.
The agreement that stipulated the property should not go for less than its valuation was drafted by Lee & Lee law firm.
Florence Regency’s unsuccessful public tender closed on 27th September, which means a private deal has been clinched even before the 10-week open window has gone halfway.
Ten weeks is the period that the collective sale remains valid after a public tender has closed. Nicholas Mak, the executive director at ZACD Group, says it is good Logan Property has accepted to pay the price that matches Florence Regency’s valuation of S$629m, because there was no guarantee the developer would succeed in other public tenders under collective sale, or even under the Government Land Sales (GLS) programme.
Moreover, Mak observes, per square foot per plot ratio (psf ppr) of S$842, which is what the land cost comes to after factoring other imminent costs, is reasonable in the context of today’s market.
Those other anticipated costs include S$288.6 as differential lease premiums, and the cost of developing the additional built-up area to reach a gross plot ratio or GPR of 2.8.
According to Derek Lee, Logan Property’s investor relations director, the developer’s plan is to put up 1,400 units on the site.
Earlier on, the three developers who bid for Florence Regency under public tender refused to raise their prices to match the property valuation, a position some analysts attributed to fear of market saturation within the Hougang-Sengkang area.
Currently, the property, formerly an HUDC estate, has 336 housing units, and this is its owners’ first attempt to sell en bloc.
Impressively, when the idea was first brought up there was general consensus, with 80% of the owners approving the collective sale within three weeks.
Now, according to Tan Hong Boon who is the regional director at JLL, each unit owner at Florence Regency is likely to take away gross proceeds between S$1.84 and S$1.89 million.