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Pandan Valley eyes record $2.6b in bid to sell en bloc

Pandan Valley eyes record $2.6b in bid to sell en bloc.

The sprawling Pandan Valley estate - one of the first condominiums to be built here - is aiming for a collective sale with a record-breaking price tag of $2.6 billion, sources close to the deal told The Straits Times.

If the 623-unit freehold development on the expansive 865,000 sq ft site pulls off the sale, it would be the biggest collective sale transaction in dollar terms struck here. Pandan Valley, which was built in the late 1970s, last tried for a collective sale deal in 2011, but it did not succeed.

The sale committee will hold an extraordinary general meeting before the end of the year to determine how the sale proceeds are to be distributed among the owners, before their signatures are collected.

Singapore's largest collective sale in dollar terms was the $1.34 billion paid by a CapitaLand-led consortium in 2007 for the former Farrer Court, which has since been redeveloped into the 1,715-unit d'Leedon.

Other developments hoping to smash Farrer Court's record include the 1,006-unit Mandarin Gardens in East Coast with a reserve price of $2.48 billion, and the 918-unit Braddell View, which is seeking $2.08 billion. Both are still seeking the 80 per cent mandate.

Pandan Valley will not have its corner of the market to itself. The nearby Pine Grove near Ulu Pandan Road is well down the road to selling en bloc. The condo, with a $1.72 billion asking price, has 78 per cent of owners already signed up.

But analysts say mega sites face an uphill task as developers were hit with heftier land acquisition costs after the July 6 property cooling measures.

"The risks of taking on big-scale projects have increased," said Mr Desmond Sim, CBRE's head of research for Singapore and South-east Asia.

"It is challenging in terms of the potential number of units these sites can yield, and whether the developer can finish selling all those units within five years without incurring penalties."

He added that Farrer Court was sold when risks and stamps duties were lower.

Pacific Mansion, which was acquired for $980 million by Singapore-listed GuocoLand, Intrepid Investments and Hong Realty, is the biggest such sale since 2016 in total value terms.

But Savills Research senior director Alan Cheong noted that Pandan Valley has a key attraction: "It is very rare to find a freehold site of this size in prime District 10."

Some analysts say the freehold estate may be a better value proposition than Pine Grove, a 99-year leasehold condo that is nearing its one-year deadline to get the 80 per cent mandate.

"The support level among owners at Pandan Valley is better. The project is more than 40 years old, and some owners want to monetise their investment," said a source close to the deal.

Pandan Valley was launched in 1977 and developed by DBS Realty. It was designed by veteran architect Tan Cheng Siong, the man behind Pearl Bank Apartments.

At the time, it included a kindergarten, a music school, four multi-storey carparks, tennis and squash courts, jogging tracks, a lake and even putting greens.

"But Singapore's largest condominium at the time, and one of its first, almost did not happen," according to DBS' website. It said the project faced a slew of challenges, including "poor market conditions, rising costs, the scale of the project, legal difficulties and even doubts over whether Singaporeans would accept the condominium concept".

"Other developers reportedly said the bank was taking a substantial gamble... At one stage, then DBS president Howe Yoon Chong said the project might have to be reviewed. However, DBS pressed on with the $100 million project... and by 1979, the condo was almost fully occupied," it said.

ERA Realty Network is the marketing agent.

Adapted from The Straits Times, Sept 11, 2018