Wednesday, October 21, 2009

Straits Times: Dragon Mansion en bloc sale sees lower offer

21 Oct, 2009
Dragon Mansion en bloc sale sees lower offer
Roxy-Pacific's $101m offer is below the $120m that owners are asking
By Joyce Teo

THE first significant collective sale in Singapore this year is on the cards -
if the condominium's owners will agree to a price that is lower than what they
are hoping to achieve.

Boutique developer Roxy-Pacific has agreed to acquire a site at Spottiswoode
Park, but at a price that is below the estate's original reserve price.

In an announcement to the Singapore Exchange yesterday, the developer said it
has offered to buy the freehold condominium site of Dragon Mansion for $100.8
million, or $860 per sq ft (psf) per plot ratio.

The asking price for the site, with land of about 3,890 sq m and a maximum plot
ratio of 2.8, is $120 million, or $1,020 psf per plot ratio. As the price is
below the reserve, a fresh set of signatures is needed, so the deal is subject
to obtaining the consent of at least 80 per cent of the owners. After that, a
sale order from the Strata Titles Board may be necessary, said a Roxy-Pacific

When Dragon Mansion became the first en bloc site to be launched for sale in
July this year, market watchers said the asking price was more suitable to the
boom times.

They said developers might not be prepared yet to pay at that level. The price
of $1,020 psf per plot ratio is significantly higher than the transacted
collective sale prices in the area during the 2007 boom.

Even at $860 psf per plot ratio, it is still above the area's boom-time prices,
said Ngee Ann Polytechnic lecturer Nicholas Mak. The break-even price is about
$1,300 to $1,400 psf, he added.

Yesterday, CKS Property Consultants, the site's marketing agent, would only say
it was working towards closing the deal.

A few collective sale sites have been launched since Dragon Mansion came on the
market, but there have been no sales yet. Last week, the collective sale tender
for the 528-unit Laguna Park closed unsuccessfully. It had two offers, but
neither bore fruit. Its reserve price of $1.2 billion works out to $844 psf per
plot ratio.

Roxy-Pacific said the purchase would be fully funded through its initial public
offering proceeds, internal funds and/or bank borrowings.

Its managing director Chris Teo said the company needs to replenish its
landbank. If Roxy-Pacific manages to close a deal, Dragon Mansion will be its
third land site. The other two sites were acquired just last month. One is a
910.8 sq m freehold site in Tembeling Road, while the other is a freehold site
of 1,055.5 sq m in Joo Chiat Place.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

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