ST : $1.7b reserve price: Will builders bite?

Nov 19, 2010

PINE GROVE COLLECTIVE SALE

$1.7b reserve price: Will builders bite?

Joint bids likely, say analysts, pointing to cautious mood

By Francis Chan & Yasmine Yahya

PINE Grove is set to be put up for collective sale but its high $1.7 billion reserve price - the same carrot that enticed residents to support the sale - may put off potential bidders, say market experts.

But most still think there would be no lack of interest from developers, which could submit joint bids for the sprawling site off Ulu Pandan Road, home to 660 units.

'I wouldn't say the price would turn them away, but it's very likely that they will form consortiums to bid for it,' said Ms Tay Huey Ying, Colliers' director of research and advisory.

Mr Colin Tan, research and consultancy director of Chesterton Suntec International, was more optimistic, saying that with the world flush with liquidity at the moment, 'anything can happen'.

But he pointed out that developers may be cautious since other projects launched between 2007 and 2008 in the area have not been fully sold yet.

'Projects like The Interlace, Farrer Court... these are huge projects that are still not fully sold,' said Mr Tan. 'So who would build a similar project when you have other existing projects that have not been fully sold?'

Jones Lang LaSalle has been appointed the marketing agent of the estate, which sits on 893,178 sq ft of land.

News broke earlier this week that the requisite 80 per cent of residents from the estate had given their support for the collective sale. This, said some Pine Grove residents yesterday, was after the reserve price had been revised upwards to $1.7 billion earlier this month.

'Some of my neighbours were still undecided, but changed their minds after they received the notice about the latest price revision,' said a 47-year-old resident from Block 1B.

At $1.7 billion, owners could receive between $2.1 million and $2.75 million per unit, depending on the size of the apartment and development charge. Most of the units are 1,754 sq ft in size.

If the sale does go through, Pine Grove would become Singapore's largest residential collective sale, beating the previous record of $1.34 billion paid for Farrer Court in 2007.

The collection of signatures from residents started on Nov 15 last year, said a resident from Block 1C.

This latest collective sale attempt by Pine Grove residents follows at least two previous failed attempts - one in 2007 and another last year. This time, collective sale committee members and property agents went door-to-door to seek support for the sale in the days leading up to the Nov 14 deadline.

'They were very proactive this time and my parents thought it was a good price, so they have agreed to it,' said a resident from Block 1P.

Residents who do not want to sell their homes, however, said they felt harassed and pressured to put pen to paper.

'Where else can I get such a spacious home?' said a semi-retired woman who has been living in Block 1B for 15 years. 'Here, I don't even close my windows and main door.'

Residents are in for a nervous few weeks as they wait for the official confirmation that an 80 per cent mandate to start the sale has been received.

franchan@sph.com.sg

yasminey@sph.com.sg