The fever is rising for the collective sale market in Singapore. The owners of the City Plaza unit are preparing for their first annual general meeting on Saturday, July 29. The owners will discuss their plan of selling their units with an estimated asking price of as high as $1 billion.
City Plaza is a freehold mixed development that is 18-storey high. It was completed in 1972 and known for its wholesale shops that mainly sell clothing.
The building is close to the Paya Lebar MRT station making it convenient to people in accessing different parts of the country. It is also used for light industrial, sale, and rental.
It has a total of 66 units that are medium in size. Shops are available downstairs and you can also find basement car park facilities.
Plenty of amenities is near City Plaza such as reputable schools and eateries. It is also near Cold Storage, Starbucks, Cheers, Unity, and more. Geylang Serai Malay Village and Singapore Post Centre are also close to City Plaza.
According to Mr. Derrick Chan, one of the owners of the units in City Plaza who called for the meeting, this is the right time for them to put the property for an en bloc sale because of the demand. City Plaza has a total of 531 units that includes 66 residential units. Mr. Chan also added that they really have to put the property for an en bloc sale to avoid spending much for the maintenance knowing that the building is already 40 years old. Aside from that, Paya Lebar is now transforming into a business centre.
Mr. Chan is a businessman who occupies six units of the condominium that has a total measurement of 5,400 square feet. Most of the units owned by Mr. Chan were tenanted. He said that the trend in selling wholesale is not in favor of them. It is because retail sales are in a critical situation while the wholesale retail is being conquered by Taobao, an online site of Chinese. It will not be practical to have a shop and a low rental. Unit owners are expecting a sale price of between $800 million to $1 billion added Mr. Chan.
The meeting on Saturday will be attended by more than 100 people and Mr. Chan hopes that they can possibly form a sale committee. Mr. Chan had already spoken to the owners of the units where he found out that more than half of the owners are interested in putting City Plaza for an en bloc sale.
Mr. James Tan, one of the owners in City Plaza said that there is a decreased when it comes to the rentals. In the early 1990s, Mr. Tan had bought his unit that measure 20 square meters wherein he collects a monthly rental of around $1,200. During the peak of the rental, he was able to collect $1,800 however recently tenants are asking to lower down the rentals to $1,000 up to $1,200.
The rates for the rentals are quite the same with that of the 1990s said, Mr. Tan. In this case, if ever that he can successfully sell his unit in City Plaza, he is not that sure if the buyer could possibly get a rental rate that will give him back the amount that he had spent.
According to Dr. Lee Nai Jia, Edmund Tie and Company’s head of research, the interest of purchasing a property for a collective sale spilled into the commercial sector where she had mentioned Citimac because of its successful collective sale. In a report, Citimac freehold industrial complex close to Tai Seng MRT Station that is being sold for $430.1 million.
Earlier this year, a collective bid was also launched by Katong Shopping Centre said Dr. Lee. Unfortunately, it didn’t manage to meet the asking price of $630 million. Dr. Lee also added that the Paya Lebar area will transform into a new growth cluster wherein Paya Lebar Quarter had made the first move in developing the area.
As a result, there will be a strong interest in City Plaza. However, he also noted that the asking price of the property which is from $800 million to $1 billion is too high causing developers to look for other viable options.