Fortune Park, a freehold site in Kovan Area has been launched for en bloc sale at S$126 million reserve price.
The site encompasses an area of 44,878 sq ft and the land rate would translate to S$1,337 psf ppr.
Fortune Park is located close to Kovan MRT and the site has been zoned Residential under the 2014 Master Plan with 2.1 Gross Plot Ratio.
During the en bloc process, the Collective Sales Committee has been able to garner 80% consensus among owners.
Going by the plot ratio the site would be able to yield 94,243 sq ft GFA when redeveloped.
Development charges aren’t payable for the site as it already has a high development baseline. The new development would yield between 100 and 120 apartment units.
Huttons Asia’s Deputy Head of Investment Sales, Angela Lim said that Fortune Park should attract developers due to its lower risk of acquisition.
According to her, the asking price is attractive despite the latest cooling measures announced by the government. She added that being located in Kovan area the site is expected to attract multiple bids.
The recent announcement of ABSD or Additional Buyer’s Stamp Duty that came into effect from July 6 hasn’t dented the enthusiasm for en bloc sales as of now.
Under this new law, developers will have to bear an additional 5% non-remissible duty when acquiring residential sites. Also the existing 15% remissible ABSD has been increased to 25% in case of residential developments.
This would mean that in the event of a developer failing to complete a residential project within 5 years of acquiring a site they would have to pay 25% ABSD apart from the interests.
According to Lee Nai Jia, Knight Frank’s Senior Director this makes smaller sites less attractive for developers despite being less risky for developers due to higher average cost of constructions per unit.
He believes developers would still prefer larger sites it these match their average pricing plans.
Fortune Park’s tender would close on 17th August at 2 PM.