Pine Grove Condominium’s Collective Sale: Seeking Mandate for a Strategic Relaunch at $1.78 Billion
The collective sale committee at Pine Grove condominium is actively seeking a mandate from owners to relaunch the collective sale with a revised reserve price of $1.78 billion. After the initial tender closed without bids at $1.95 billion, ERA Realty Network, in private treaty discussions with potential buyers, proposes the adjusted price following a fair valuation by Premas, a unit of Cushman & Wakefield.
Key Information:
- Previous Tender and Discussions:
- The initial public tender at $1.95 billion in November 2023 yielded no bids.
- ERA engaged in private treaty discussions with interested parties post-tender.
- Revised Reserve Price:
- Aiming for a fair valuation, the new reserve price is set at $1.78 billion.
- Premas conducted the assessment, considering the redevelopment potential into a 2,050-unit development.
- Developer Interest and Upcoming Tender:
- Several developers have informally expressed interest at the specified valuation.
- Efforts are underway to secure the necessary 80% consensus before the tender deadline in mid- to late March 2024.
- Extraordinary General Meeting (EOGM) and Signing Session:
- An EOGM on Jan 21 will assess owners’ interest in relaunching the collective sale.
- Signatures gathered during the session will gauge the initial interest level at the new reserve price.
- Potential Gains for Unit Owners:
- At $1.78 billion, land rate is $1,335 per sq ft per plot ratio (psf ppr).
- Owners of different-sized units stand to gain substantial proceeds.
- Comparison with Nearby Developments:
- Pine Grove’s land rate is competitive compared to recent Government Land Sales (GLS) sites.
- Recent GLS sites saw lower land rates per sq ft per plot ratio.
- Challenges in Collective Sale Market:
- The collective sale market faces challenges, with only three deals worth $574 million concluded in 2023.
- Higher development risks, mismatched price expectations, and changes in floor area definitions contribute to the market stalemate.
- Policy Changes Impacting Expectations:
- The harmonisation of floor area definitions, effective from June 1, 2023, has affected the saleable area and margins for developers.
- En bloc owners have raised their asking prices due to surging private home prices, leading to a mismatch in expectations.
- Pine Grove Background:
- One of the first HUDC estates privatized in 1996, Pine Grove holds significance in Singapore’s property landscape.
As Pine Grove condominium seeks a fresh mandate for a strategic relaunch, the revised reserve price positions it competitively in the evolving real estate market, offering a potential win-win for both owners and developers.
