THE Laguna Park sales committee has voted to call off the faltering collective sale of their Marine Parade condo, after an initial bid failed.

The on-off sale would have been one of the largest here, with an asking price of around $1 billion. But lukewarm response from developers and a fast-approaching deadline for a sale to be completed sealed its fate – for now.

Mr Karamjit Singh, managing director of Credo Real Estate, told The Straits Times that the Laguna Park sales committee decided to let the collective sales agreement (CSA) expire next month: ‘To get the 80 per cent takes time, and because it’s a very big development, there was not the luxury of time.’

Last month, owners in the East Coast estate failed to sell the property en bloc for $1.2 billion through a tender process. They were considering a lower price of between $950 million and $1 billion, below the $1.2 billion reserve price which would require them to get an 80 per cent vote of approval from owners.

The impending expiry of the CSA left them with little time to get the required signatures. The committee thus decided that instead of pursuing the more than 400 signatures needed, it would be better to start afresh with a new CSA next year, giving them a full 12 months to pursue another sale, Mr Singh said.

Though there had been talks with a potential buyer, nothing came of them, given the sales committee’s decision not to pursue the signatures.

It is still too early to say when a new sales committee will be nominated, but Mr Singh says it will be next year.

Owners had not been officially informed of the development when The Straits Times called yesterday, but one who was against the sale and declined to be named was relieved: ‘It’s a wise move because of the present market situation. One year later, the property market might be picking up again and we would be more justified to sell.’

The Laguna Park sale has been surrounded by drama from the word go. The development obtained the 80 per cent approval from the 500 or so owners late last year, but the $1.2 billion price was decided late 2007.

There was still a vocal minority strongly opposed to a sale, and incidents of vandalism occurred at the condo protesting the deal.

Laguna is a former HUDC estate with a land area of about 677,493 sq ft and a gross plot ratio of 2.8.

If the sale of the 528-unit leasehold project had come off, it would have only been the second en bloc deal this year. The first was the smaller Dragon Mansion in Spottiswoode Park Road, which eventually sold for $100.8 million last month despite asking for $120 million.

Source : Straits Times – 19 Nov 2009

Home owners at the Laguna Park condominium in Marine Parade are now faced with the choice of selling their homes at an average of 20 per cent lower than their initial asking price.

This comes after a failed tender earlier this month.

Then, the site received a bid from an Indonesian-owned, locally incorporated company of S$1.728 billion, but a downpayment could not be made in time.

Since then, the collective sale committee has circulated a letter informing owners of a new potential selling price of S$967 million.

Under en bloc sale regulations, 80 per cent of owners need to vote in favour of this price tag before the sale can proceed.

When Laguna Park opened for tender in September, most owners stood to gain around S$2.1 million to S$2.3 million each. Penthouse owners would have gotten between S$3.5 million and S$4.1 million each.

But at the new price being considered now, owners will get almost 20 per cent less or about S$1.8 million.

Some analysts said this price might be too low to be attractive to sellers. But they said sellers need to take into consideration some of the less positive aspects of the property.

Nicholas Mak, property consultant, said: “They must be aware that this is an ageing development and the lease of 99 years has been run down significantly.”

He added that sellers who are planning to buy similar properties that also have a view of the sea will probably have to pay as much as SS$2 million.

And he expects most owners to have to have to downgrade from their older, but more spacious units, to smaller new homes.

Charges to top up the lease to a 99-year term and to increase the site’s plot ratio comes up to about S$440 million.

Earlier, buyers would have been looking at paying around S$850 per square foot per plot ratio – a price many analysts considered expensive.

At the new prices, the cost comes down to S$700 per square foot per plot ratio for the 528-unit leasehold Marine Parade project.

Property consultancy Colliers said S$967 million is a more realistic selling price, and could lead to some developers re-considering the tender.

However, many analysts also noted that the total price is still very hefty for any one local developer in today’s market.

Laguna Park has a land area of 677,463 square feet, which means about 1,500 apartments can be built on the site.

According to the development’s marketing agent Credo, the sales committee has until around mid-November to strike a deal with a buyer, before the collective sale agreement expires on December 19.

Source : Channel NewsAsia – 26 Oct 2009

OWNERS of units at Laguna Park, whose $1.2 billion collective sale bid failed last week, are now considering a lower sale price of between $950 million and $1 billion.

The new range works out to between $693 and $723 per square foot per plot ratio (psf ppr), including an estimated $400 million payable to the state to raise the intensity of the site to the plot ratio of 2.8, and topping up the lease to a fresh 99-year term. This compares to $844 psf ppr at the reserve price of $1.2 billion.

These were some of the numbers discussed at a meeting of about 200 Laguna Park residents yesterday afternoon, called to consider the results of the failed tender and discuss possible options.

Even though two bids had been submitted by the close of tender last Tuesday, no buyer put down payment to seal the $1.2 billion deal.

Credo Real Estate, which is marketing the 528-unit leasehold Marine Parade project, said last week that one submission from an Indonesian-owned, locally incorporated company offered $1.728 billion – above the owners’ reserve price.

But it withdrew its offer on Thursday, citing difficulties faced by its bankers in processing and remitting the funds to Singapore. The only other submission was from a prominent local developer, with whom Credo is now conducting negotiations.

Credo’s managing director, Karamjit Singh, said that the owners now have till around mid-November to strike a deal with a buyer, before the collective sale agreement expires in December.

The sales committee will now need 80 per cent of the Laguna Park owners to agree to what is likely to be a lower sale price than their reserve, in order to close a deal.

Laguna Park has a land area of about 677,463 sq ft. Some 1,500 apartments with an average size of about 1,200 sq ft each can be built on the site.

Source : Business Times – 19 Oct 2009

Owners of units in Laguna Park, whose tender closed unsuccessfully on Friday, are now considering selling at a lower price.

The new price is said to be between S$950 million and S$1 billion.

The development’s marketing agent Credo said residents are likely to receive letters advising on the situation in the next two or three days.

Earlier, many property analysts said Laguna Park’s initial S$1.2 billion reserve price was on the high side.

Residents of Marine Parade’s Laguna Park streamed out of the gates at about 4.30pm on Sunday afternoon, after a 2.5-hour meeting to discuss the fate of the collective sale of the development.

Despite two bids being made when the tender closed last Tuesday, no buyer managed to put down a payment to seal the S$1.2 billion deal.

At that price, each owner would have received between S$2.1 million and S$2.3 million.

Residents MediaCorp approached all refused to come on camera, but off camera, it seems their views are mixed. While some are agreeable to accepting a lower price, other said they would rather wait for the market to pick up again before relaunching the collective sales process.

Some noted that while those present at the meeting were split into two camps, the entire meeting went by cordially.

They attributed this to the people management skills of the sales committee.

The question now is whether the sales committee will manage to garner the crucial 80 per cent consent level from its owners, with the lower price tag.

The sales committee has until December 19 to close a deal before the collective sale agreement expires.

If there is no deal by then, the entire collective sales process will have to be restarted again.

One local company, whose shareholders are based in Indonesia, more than matched the reserve price, at S$1.7billion.

But Credo said that by last Thursday evening, the firm decided to pull out because it could not get its bankers to provide the funds for the bid.

Credo said the second expression of interest came from a prominent local developer. MediaCorp understands the developer is now expected to further negotiate with the majority owners before settling on a firm price.

Source : Channel NewsAsia – 18 Oct 2009

OWNERS of East Coast condominium Laguna Park have failed in their bid to sell the property en bloc for $1.2 billion through a tender process.

Industry analysts say the result was not surprising, considering the high asking price.

However, in a curious twist of events, one company had submitted a bid for $1.728 billion – only to withdraw the offer on Thursday night.

The estate’s marketing agent, Credo Real Estate, said yesterday in a statement that it had received two submissions at the close of the tender on Oct 13.

One of them was from a locally incorporated firm which offered the eye-popping $1.728 billion bid. The other expression of interest was from a ‘local and prominent developer’, which was believed to have made an offer below the reserve price.

Credo declined to name both firms, citing confidentiality agreements.

But it is understood that principal shareholders of the first firm which had offered above the reserve price are based in Indonesia, said Credo.

The firm was due to submit the tender deposit on instructions specified by the owners, but the firm’s lawyers wrote in on Thursday night to withdraw the offer. They said the firm faced ‘difficulty in their bankers processing the funds and remitting them to Singapore’, said Credo.

Owners of the 528-unit development at Marine Parade yesterday said they had not heard any news officially from the sales committee, although a meeting for owners has been slated for tomorrow.

One owner, who declined to be named, said she was neutral as to whether the sale went through or not. ‘Whether it sells or not, it doesn’t really matter,’ she said.

Chesterton Suntec International’s research and consultancy director Colin Tan said the condo’s failure to find a buyer ’simply confirms that developers are not going to pay unrealistic prices’.

‘Developers are signalling to sellers that if you’re not realistic, we won’t be interested in putting in bids.

‘They are mindful of the ability of home buyers to pay even higher prices. This is not sustainable so they’re not willing to bear higher risks,’ said Mr Tan.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak noted that en bloc deals have not seen much success this year.

Dragon Mansion in Spottiswoode Park, as well as Changi Garden Condominium at Jalan Mariam, have been tendered with no deals done.

‘Owners are still expecting pre-crisis price levels which developers are now not prepared to pay. Either the owners wait even longer, or prepare to accept a lower price,’ said Mr Mak.

This might prove difficult. As another Laguna Park resident put it: ‘I don’t think anybody will sell at a lower price.’

Credo said it is still in negotiations with the local developer on a possible deal. Owners have until mid-December, when the collective sales agreement expires, to sell the estate via private treaty.

The former HUDC estate has a large land area of about 677,493 sq ft and a gross plot ratio of 2.8.

The sprawling 30-year-old condominium has been in the headlines over a spate of vandalism attacks on the property of residents who were not keen on the sale.

THE PRICE FACTOR

‘Owners are still expecting pre-crisis price levels which developers are now not prepared to pay. Either they wait even longer, or prepare to accept a lower price.’ – Ngee Ann Polytechnic real estate lecturer Nicholas Mak

Source : Straits Times – 17 Oct 2009