Collective sales seem to have gripped Singapore firmly and the present Allgreen acquisition has set a new benchmark for similar upmarket properties. The Bukit Timah area is not new to Allgreen properties and they have many other condominiums under their belt in the area.
The present acquisition however comes after 6 long years of hiatus. The price paid by Allgreen for the Royalville amount S$477.94 million translates to S$1,960 psf ppr while it is S$1,840 psf ppr for the Crystal tower freehold property.
Meantime, Lawrence Wong, the National Development Minister and the Central Bank of Singapore have warned homebuyers and developers to exercise caution while jumping into the collective sale fray.
According to Edmund Tie & Company who were responsible for marketing the two sites acquired by Allgreen properties, competition was intense for both en bloc sites and as many as nine bids were received from foreign as well as local developers with Crystal Tower facing more competition with 12 bids.
The asking price for Royalville was set at S$368 million and many of the bids received were above this asking price, according to a spokesperson of Edmund Tie & Company.
In 1998 and 2007 Allgreen had launched the Bukit Regency and The Cascadia respectively in the Bukit Timah area as freehold condominiums. But after it acquired a 99-year leasehold in 2011 for the Upper Serangoon Crescent through a GLS (government land sale) programme for S$270.8m translating to S$291.39 psf ppr, and developed it into Riversails condominium with 928 units, it was a long wait of 6 years before Allgreen could winning another bid.
All through this period, Allgreen was active in participating in the GLS tenders, but without success.
This time around, the bullish bid by Allgreen translates to a breakeven price tag of S$2,500 – S$2,600 psf for Royalville.
In order to make profits for this freehold site, the selling prices for this property could therefore be around S$2,800-S$2,900 psf for Royalville if new units launch.
According to some analysts, the present bid for Royalville from Allgreen would be seen as a guidance for the upcoming GLS tenders closing on 5th December at the Fourth Avenue site throwing the earlier projections out.
Earlier analysts had expected eight to fifteen bidders for this site with the winning bid around S$1,392-S$1,580 psf ppr. Developers need to consider their urgency for acquiring land as well as the 99-year tenure of the lease.
- The property is freehold, which gives the potential buyer perpetual ownership
- The property is prime, being situated on Bukit Timah Road
- There is no development charge being levied on the main property, a fact that has been confirmed by Edmund Tie & Company, Royalville’s marketing agent.
- The area has not offered such freehold property for sale in the last decade, so many prospective buyers might be eager to try their luck.
- The property is just 260m away from the 6thAvenue MRT station.
- The property is on a large expanse, which gives the potential developer great leeway to design a modern condominium comprising over 320 residential units, each with all facilities of a complete suite. These sentiments were expressed by Swee Shou Fern, Edmund Tie & Company’s senior director in charge of investment advisory.
- The asking price is reasonable considering the property’s prime location, sentiments that have been echoed by Tan Hong Boon, regional director in charge of investments at JLL, a real estate firm with global reach.
- It is easy to dispose of the property’s new units within 5yrs and avoid paying additional buyer’s stamp duty (ABSD), since the property is of medium size.
- There are many respectable schools around, which include Raffles Girls’, Methodist Girls’ and Nanyang Primary schools; the Hwa Chong Institution; as well as the National Junior College.