Ivory Heights Falls at the Last Hurdle to Go En Bloc
The 654-unit Ivory Heights failed to achieve minimum 80% consent by the Sep 30 deadline. This prevented the launch of public tender for the former HUDC estate located in Jurong East which has been privatized.
It becomes the first mega site in the recent months to have failed in launching its tender.
Market analysts cited two major factors behind this failure. First the announcement of the new cooling measures on July 6 and also the Kuala Lumpur-Singapore High Speed Rail project which was one of its greatest USPs being postponed.
Vincent Ng, Chairperson of Collective Sale Committee said that some residents were reluctant with the idea of en bloc sale at the moment although they had revised the reserve price to $1.68 billion from the earlier $1.34 billion.
Had the sale gone through the owners would have pocketed between $2.5 million and $2.8 million which is above the $2 million and $2.3 million estimated initially.
69-year-old Mr Ng is disappointed and stated that they reached 74% consent few months ago and 480 owners had agreed to the idea.
They however failed to get the consent of another 40 owners as most of them wasted precious time asking for more and the market conditions changed in the meantime.
He also added that the present Sale Committee shall be dissolved as they failed to achieve 80% consent and the matter for a fresh tender rest with the residents.
Ivory Heights occupies on 825,502 sq ft of area and enjoys unobstructed view of the famous Jurong Lake and also the Japanese and Chinese Gardens in the vicinity.
Not only that, the site is within Singapore 2nd Central Business District Zone and with many upcoming developments such as world class Science Centre, Lakeside Village, Jurong Lake Gardens and much more.
Jurong East MRT Station is located only 500m away from the site and the residents are serve with many mega malls, food centres, schools that can be found within.
The site has been categorized into a Residential Zone as per 2014 Master Plan and has 1.6 plot ratio. 68 years still remains in its lease tenure.
For most analysts the high price tag of Ivory Heights wasn’t surprising given its advantageous location with Chinese Garden and Jurong East MRT Stations within its proximity and also the planned High-Speed Railway terminus.
Savills Singapore’s Senior Director of Research and Consultancy, Mr Alan Cheong believes that with the High-Speed Railway project shelved for the moment the site lost its USP and the high price tag wasn’t justifiable anymore.
It must be noted that only last month Malaysia and Singapore decided to postpone the project by another two years.
Mr Cheong added that apart from this reason other factors that worked against Ivory Heights were the increased cost of land acquisition as well as the potential penalties that developers may need to pay as mandated by the new cooling measures.
The new cooling measures that were announced on the 6th of July mandate developers to pay 5% non-remissible ABSD (Additional Buyer’s Stamp Duty) along with 25% remissible duty in case developers fail to sell all units in the project within a strict timeframe of 5 years from acquiring the land.
Ivory Heights’ failure may just be a precursor to the trends they are likely to set in the market in the coming months.
Pine Grove Sale Committee would be nervous at the moment as their deadline to achieve 80% consent would expire on 28th of October.
As of now 78% owners have given their go ahead to the $1.72 billion reserve price en bloc sale.
Terence Lian. Head of Investment Sales at Huttons Asia who are the marketing agents for Pine Grove stated that 2% residents of the property who have so far not agreed to the sale should be realistic about the asking price so that the Ivory Heights script isn’t repeated in their case and the en bloc dream lapses.