Tuesday, March 15, 2011

3rd collective sale bid by Pearl Bank

OWNERS of units at the distinctive Pearl Bank Apartments near Chinatown are making their third attempt to pull off a collective sale.

The Straits Times understands that the 280-unit development has an estimated price of $750 million.

That was the price the owners rejected as too low when they tried to sell en bloc in 2007. Another deal launched in 2008 also fell through.

If the $750 million sale is achieved this time, owners of each 1,324 sq ft two-bedroom apartment would reap about $1.81 million - or $1,367 per sq ft (psf) - for their units, while the 3,993 sq ft penthouses would fetch up to $4.8 million each. That is a price of about $1,202 psf.

Market rates are much lower. A 2,185 sq ft apartment in the 38-storey estate sold for $2.1 million, or $952 psf, in January, while a 463 sq ft flat in nearby People's Park sold recently for $488,000, or $1,054 psf.

The ageing 99-year leasehold project has 65 years of its lease left. It has a built-up plot ratio of 7.4, with a maximum gross floor area of 613,000 sq ft. This plot ratio could yield more than 500 apartments of 1,200 sq ft.

PropNex chief executive Mohamed Ismail said the property's central location will ensure keen interest from developers, but added that the current market sentiment is subdued.

'Interest in the property might be dampened by the revised development charges. Potential buyers will also be looking out for how much the differential premium for topping up the lease will cost them,' he said.

The building has been hailed as one of Singapore's architectural landmarks, and the Urban Redevelopment Authority (URA) said members of the public have asked for the horseshoe-shaped building to be conserved.

Mr Ashvinkumar Kantilal, president of the Singapore Institute of Architects, said Pearl Bank's redevelopment would be a great loss to the architectural community.

'It is unlikely that developers will take into account any sentimental value when deciding how to redevelop the building,' he said.

A Pearl Bank resident and the chairman of its management committee, who gave his name as Dr S.T. Lee, said although he would like to see the building preserved, maintaining it could cost millions of dollars.

'It's difficult to get a loan to buy a unit in such a mature development. Holding on to Pearl Bank means the owners will not be able to realise the value of their homes,' he said.

'If the URA can give some help with the topping up of the lease, preserving the building might be an option I would consider.'

Although collective sale properties are not subject to any demolition requirements after a sale, the URA said the buyer could choose to redevelop the site.

It added that it can evaluate buildings for conservation if an application is submitted.

Two other big deals involving properties being sold en bloc are also in the works, with Pine Grove launching its bid for a $1.7 billion sale last week. Owners of units at Tulip Garden are also on the hunt.

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