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3 en bloc bids hit by weaker sentiment as property cooling measures take their toll

13 Aug, 2018

The latest property cooling measures have taken their toll on plans by at least three freehold projects to sell en bloc, with a marketing agent resigning from two, while a third has shelved plans for a sale.

PropNex, the marketing agent of Boonview in Marymount Terrace and Le Wilkie in Wilkie Road, has resigned from handling their collective sales, while Pasir View Park in Pasir Panjang has shelved its first attempt to sell en bloc after the new measures kicked in on July 6.

PropNex is still marketing freehold condominium Kim Sia Court, located near Mount Elizabeth hospital, which has an en bloc guide price of $688 million, it said.

Consultants say as many as 30 en bloc sites have failed to secure a buyer since January, and no deal has been inked since the new measures were announced.

A PropNex spokesman told The Straits Times that its team has resigned from the Boonview and Le Wilkie projects, but believes these "would possibly fetch better prices due to their good locations once market sentiment improves".

Former Boonview collective sale committee (CSC) chairman Ng Yong Liang said the committee, which tendered its resignation on July 31, aborted the sale as it "is not viable at this stage".

In its resignation letter, the CSC said PropNex resigned as "they are not confident that the large gap between the owners' expected price and the price that the developers are willing to pay can be bridged".

Boonview, which has 119 units and two shops, had initially agreed to a guide price of about $305 million, reflecting a land price of around $1,900 per square foot per plot ratio (psf ppr), Mr Ng said.

"But after we found out JadeScape, a leasehold property, may launch at around $1,700 psf, some owners felt we should ask for at least $2,000 psf because we are freehold. But that's not possible. We are not on Orchard Road," he said.

JadeScape is on the site of the former Shunfu Ville in Marymount Road.

Following the cooling measures, PropNex advised the Boonview committee to reduce the reserve price significantly, the CSC said.

Two other marketing agents it approached also advised reducing the reserve price to between $250 million and $290 million.

But even at the reduced price, "they are not confident there will be interested buyers and also not optimistic they can achieve 80 per cent signatures from the owners", the CSC said in the letter.

Also citing the new measures, the 80-unit Pasir View Park decided to not go ahead with its collective sale, its CSC co-chair Frances Tan said.

But many owners of the 172-unit Kim Sia Court still want to try their luck despite PropNex's advice to lower their reserve price. "We feel our location is in a prime area and should command a premium," said its CSC chairman V. Selvam.

Meanwhile, Lakeview, a former HUDC estate in Upper Thomson Road which has 240 units and 59 years left on its lease, is considering whether to reduce its reserve price at an upcoming extraordinary general meeting, a CSC member said.

"The reserve price may have to be lowered, but with JadeScape looking strong, our position may not change that much," said a Lakeview resident who wanted to be known only as Mr Goh.

Adapted from The Straits Times, 13 August 2018.