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Pine Grove gunning for fourth-time lucky in $1.95 billion collective sale

SINGAPORE – Pine Grove condominium is back on the bandwagon for a collective sale via public tender – this time at a reserve price of $1.95 billion.

The 660-unit former HUDC estate in Ulu Pandan, which has 60 years left on a 99-year leasehold, was previously put up for sale in 2019 at $1.86 billion.

This is the fourth collective sale attempt by Pine Grove since 2008, and the third time it has achieved 80 per cent consensus for the sale.

If successful, owners of 1,163 sq ft units in the project stand to get gross proceeds of about $2.39 million, while those who own 1,934 sq ft homes could get $3.2 million, according to marketing agent ERA Realty Network.

At $1.95 billion, the land rate works out to $1,434 per sq ft per plot ratio, after factoring in an additional 10 per cent bonus gross floor area under various incentive schemes.

The land rate also includes an estimated land betterment charge (LBC) of about $1 billion for intensification and lease upgrade to a fresh 99-year lease, ERA said. Developers pay an LBC for the right to enhance the use of some sites or to build bigger projects on them.

The 893,218 sq ft site has a gross plot ratio of 2.1 and can be redeveloped into a residential project with up to 2,050 new units, subject to planning approval.

Mr Tay Liam Hiap, ERA’s managing director of investment sales, said: “Pine Grove is the largest residential site, both in terms of land size and price quantum, to be launched for sale (en bloc) this year.

“The site is launched now because we have a year from achieving the 80 per cent consensus to find a buyer for the site and make an application to the Strata Titles Board for a sale order.”

Based on the better-than-expected tender result for a government land sale (GLS) site at Pine Grove (Parcel A), the owners are hopeful of a better outcome, it added.

In June 2022, a joint venture between UOL Group and Singapore Land Group came out tops with a bid of $671.5 million or $1,318 psf ppr for the GLS plot – just $800 ahead of a bid from a unit of Allgreen Properties. The plot had attracted five bids in what analysts described as one of the tightest races at the time.

But Colliers’ head of research in Singapore, Ms Catherine He, noted that despite the tight race, the number of bids was still lower than the average of seven received for tenders that closed earlier in 2022.

Although unsold new home supply remains low, developers face heightened development risks from higher construction costs, growing macro-economic uncertainty and dampening effects from the latest rounds of cooling measures, said Mr Wong Xian Yang, head of research for Singapore and South-east Asia at Cushman & Wakefield.

“The en bloc market also faces competition from the GLS programme. The Government has ramped up the supply of GLS sites to cool prices and may continue to do so. Some developers prefer to acquire GLS land as the process is more straightforward,” he said.

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According to Cushman, only three projects with a total value of over $665.2 million were sold en bloc from January to August 2023, down from 11 projects with a total value of $1.87 billion sold in the same period in 2022.

“The gap between buyers and sellers continues to weigh on the overall en bloc market. Developers are cautious on bids, while sellers’ expectations have remained steady as replacement costs are high,” Mr Wong said.

A Knight Frank report in April 2023 noted that only a third of collective sales have succeeded in the current cycle, down from 60 per cent in the 2017-2018 boom cycle as developers turn cautious in the face of heightened risks and compressed profit margins.

The most recent successful residential en bloc deal involved the sale of Kew Lodge, a freehold landed residential site in District 11, to Woh Hup subsidiary Aurum Land for $66.8 million.

Pine Grove was one of the first two HUDC estates to be privatised in 1996. Out of 18 former HUDC estates developed between 1974 and 1987, Pine Grove ranked second in terms of land size, after Braddell View, and followed by the former Farrer Court.

The tender for Pine Grove will close at 3pm on Nov 29.

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