Tulip Garden up for sale again - at $650m
Condo owners stand to collect between $3.14m and $5.45m if deal goes through
By Esther Teo
TULIP Garden is up for collective sale again, with a hefty price tag of $650 million although there are expectations keen developers could offer even more.
The 164-unit development completed in 1985 is sited primarily in Farrer Road but also backs onto Leedon Heights, on a property golden mile where Singapore's two largest collective deals were struck.
The former HUDC Farrer Court site - now CapitaLand's 1,715-unit d'Leedon project - went for $1.34 billion in 2007 while Leedon Heights was sold for $835 million in the same year.
Tulip Garden was actually sold en bloc for $516 million in July 2007, but the deal fell through when the buyers - a consortium led by developer Bravo Building Construction - backed out in 2008, citing trouble raising funds for the purchase.
If the Tulip Garden deal comes off now, it will be the third largest by value here and the first freehold collective sale that is more than $500 million in three years.
Marketing agent Credo Real Estate said more than 80 per cent of the owners signed a collective sale agreement in October. Owners at the estate, which has flats from 1,700 sq ft to 3,400 sq ft, stand to reap between $3.14 million and $5.45 million - around 50 per cent to 70 per cent above the market rate.
Credo managing director Karamjit Singh said developers have been craving large-scale freehold sites in prime districts. He 'would not be surprised' if the highest bid exceeds $700 million.
'The average deal size of the more than 30 successful en bloc sales this year so far was around $50 million. These sites tend to suit small to medium developers. For the large developers, they had lots of sites from the Government to consider but they are all leasehold and located in suburban estates,' he said.
At a gross plot ratio of 1.6425, the $650 million price works out to $1,250 per sq ft (psf) per plot ratio (ppr) for the 316,708 sq ft land parcel.
But if a developer chooses to maximise the 10 per cent allowable space for balconies, the effective land cost inclusive of $20.5 million in development charge is $1,203 psf ppr. Developers pay development charges to enhance the use of residential sites.
At this price, a developer could expect to break even at about $1,800 psf, said Credo. Units at neighbouring 99-year leasehold d'Leedon are being sold at about $1,680 psf while Glyndebourne, a freehold project off Dunearn Road from City Developments, achieved average prices of about $2,100 psf during its preview in October.
The Tulip Garden site, which is in District 10 and near the upcoming Farrer Road MRT Station, is zoned for residential use up to 12 storeys. It can be reconfigured into 400 flats with an average size of 1,325 sq ft, depending on layout and configuration, Credo said.
Mr Ben Liang, who has been living at Tulip Garden for more than 10 years, said he had supported the collective sale as he could get at least 30 per cent more than from selling his apartment individually.
'The development is getting old and and if you wanted to renovate the place you would have to change many things... It's better to get more value by selling it en bloc,' he added.
The huge Tulip Garden deal underlines the surge of collective sale activity this year with 31 sales sealed for a total of $1.5 billion. It is a striking change over last year when the $100.8 million Dragon Mansion sale was the only deal struck.
More mega sites are also expected on the market over the next few months.
Pine Grove in Ulu Pandan Road is expected to launch its tender early next year with a reserve price of $1.7 billion while Hawaii Tower in Meyer Road is looking at a reserve price of $700 million.
Experts warn the market could have trouble absorbing such big sites, especially if tenders close around the same time.
Colliers International's research and advisory director Tay Huey Ying added: 'In the current market where there is still uncertainty, bite-sized collective sale developments are still preferred and are easier to sell... They also involve less risk.'
But Ms Stella Hoh, head of investments at Jones Lang LaSalle, said developers remain keen to replenish prime sites.
esthert@sph.com.sg
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Other mega collective sales
Farrer Court: $1.34 billion (June 2007)
Leedon Heights: $835 million (April 2007)
The Grangeford: $625 million (June 2007)
UIC Building: $600 million (April 2007)
Gillman Heights: $548 million (February 2007)
Tulip Garden, now a 164-unit development (above), is near the upcoming Farrer Road MRT station. The site is earmarked for residential use up to 12 storeys and can yield 400 flats of an average size of 1,325 sq ft, depending on layout. -- ST PHOTOS: LENNE CHAI
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