New Cooling measures have taken a toll on the en bloc sale market. Minbu Villa was one among the many en bloc sales that failed in their attempt in the recent months.
The freehold residential site which is located in Novena has launched a second tender for S$145.8 million.
However, there is a chance for further lowering of the reserve price if 80% owners agree to it. It had launched a tender in March earlier and closed on 17th April without attracting a bid.
At present there is consensus among 60% owners by strata area and also in terms of share value to bring down the reserve price further to S$129.1 million.
They have signed an additional agreement to this effect which shall bring down the land rate to S$1,200 psf ppr.
With 2.8 plot ratio the site has 38,426 sq ft land area. It was completed in early 1980s and the ten-storey building has 33 apartments along with a penthouse.
The Singapore Land Authority has given its in-principle approval for alienation of 195.9 sq m land which sits adjoining the site. This could hypothetically bring down the land rate by around S$34 pf ppr further.
The tender for this site shall close on the 18th of December.
It is a Catch 22 situation for the enbloc owners. On one hand the revised guidelines that regulate maximum number of units that would be allowed outside the central area would come into effect within months.
On the other hand, the cooling measures have dented spirits among developers. It must be mentioned that since the beginning of the year, 60 sites have seen their tenders close without attracting an interested buyer.
Savills Singapore’s Senior Director for Investment Sales, Ms Suzie Mol who is overseeing this sale said that the previous tender for the site had failed as there were many other sites in competition and also because the prices back then weren’t as per the expectation of the owners.
She added that in this round the owners would receive move even in the worst case where the prices are lowered.
She added that since the new cooling measures were announced, most owners have had to rework on their expectations and are also agreeing to lower the reserve price due to downward trend in prices.
Minbu Villa has the potential to be redeveloped into a 36-storey apartment upon receiving necessary approvals.
The site has a maximum allowable GFA of nearly 107,593 sq ft. The site has a development baseline of 125,378 sq ft and hence no development charges are payable on this property and the developers would also enjoy 10% bonus for the balcony area.