In a major blow to the en bloc sales in Singapore Horizon Towers’ tender ended last Wednesday (Sep 12) without attracting any bids.
It was the first among the major collective sales to have been launched after the announcement of new cooling measures in July.
Though most analysts didn’t expect great interest in the tender, the fact that it wasn’t able to attract even a single bid has dented the mood in the market especially properties that are in the billion-dollar club.
JLL Singapore the marketing agents for Horizon Towers speaking to the media confirmed that there were no bids when the tender closed on September 12.
Interestingly the tender itself was extended from its initial closing date August 7. Owners of the property which is located along Leonie Hill Road now have 10 weeks in hand to secure a private deal for the sale which had fixed S$1.1 billion as reserve price.
The 99-year leasehold site that covers an area of 1.9 hectares launched the tender on 5th July. As luck would have it the Government announced the cooling measures that very night which came into effect from 6th of July.
With its failure to attract any bids, the 211-apartment unit site which is located in a great location has raised serious question marks over the fate of other billion-dollar collective sales.
There are many in the fray that includes East Coast’s Laguna Park which will launch its tender on 18th of September and has fixed S$1.48 billion as reserve price.
Also, in the process is Pandan Valley, a 623-unit developed in Holland Area whose owners recently gave their consent to a record S$2.6 billion reserve price.
JLL sent a fresh letter to the owners of Horizon Towers where it mentioned that in case no buyers are interested in the property by the deadline of a private treaty deal that ends on November 20, the Collective Sale Committee along with JLL and the lawyers would attempt at a fresh tender at the start of 2019.
A spokesperson for JLL said that they have time till March 2019 to be able to secure sale contract for the property.
In the letter sent to the owners the firm said that owners have time till 21st of May 2019 for conclusion of the sale contract whereby they can apply for a sale order with the Strata Titles Board (STB).
In this regard the lawyers would require between 2 and 3 months for submitting an application to the Strata Titles Board.
The letter added that the developers were interested in adding to their land bank but as of now they have resorted to a wait and watch policy whereby they would assess the market and map it against the cooling measures.
It reiterated that the sale volume shall remain effected in the near term but they were hopeful that the market would gain its confidence given that fundamentals are strong and there is growing demand for new properties.
Going by the S$1.1 billion reserve price the land rate for the site stood at S$1,786 psf ppr, after taking into account the 10% balcony area as well as the top-up premium (S$220 million) for the lease that the developer would have to pay.
It may be recalled that in the year 2009, an attempt at en bloc sale of Horizon Towers at S$500 million reserve price didn’t materialize as there are disputes and the Court of Appeal stalled the sale citing improper handling of the process.