Saturday, March 30, 2013

$450m payout for Pearls Centre acquisition

The Straits Times  |  MARCH 28, 2013
Compensation for owners, tenants, residents affected

Pearls Centre residents, shop owners and tenants are getting $450 million from the Government, which has acquired the site for the upcoming Thomson MRT Line.

The Singapore Land Authority (SLA) said letters were sent out to those affected yesterday, informing them how much each will receive.

There are 243 shops, offices and residential units in the 99-year leasehold development, although The Straits Times understands there are about 160 property owners, with some having up to 20 units.

The SLA did not say how much each will receive, but said that the amount takes into account market value, the cost of relocation, stamp duties and legal fees for the purchase of a similar replacement property, as well as an extra payment to mitigate the financial impact of the acquisition.

Owners will also be exempt from recent loan curbs, and those eligible to buy a new HDB flat will not be subjected to the 30-month debarment period imposed on former owners of private properties.

All those affected in the 23-storey building in Chinatown will receive 80 per cent of their payments once they hand over their title deeds, and the rest after the units are returned to the Government, which will take possession in August next year. The building had a remaining tenure of about 54 years.

The compensation, said SLA's statement, "does not take into account speculative factors, such as the possibility of an en bloc sale".

The issue of compensation has been a bone of contention among owners since the strata-titled building was gazetted for compulsory acquisition on Aug 29 last year. Back then, owners were taken by surprise, and had called for more compensation, in particular given the potential of an en bloc sale. A collective en bloc sale committee had been set up just prior to the acquisition announcement.

Tanjong Pagar GRC MP Indranee Rajah, who had urged the SLA to look into the concerns of those affected, said yesterday the compensation "met or exceeded" the majority of claims. But she added that some owners had also submitted "excessive claims" of two to three times the market value of their units: "It was not possible to meet these claims."

When contacted, Mr Lo Hock Ling, who owns several shops in the building, said the package he received was "fair". The 83-year-old, who bought them for about $420 per sq ft in 1992, declined to reveal how much he received.

But he pointed out the acquisition was made in August last year, and owners would be paid only later this year. "In the span of nine months, property prices have risen. And we might be unable to buy replacement properties given the higher prices."

Tenants like Mr Sam Wang, 46, who operates Hanboat, a Chinese bookshop in Pearls Centre, received only relocation expenses and the ex-gratia payment. "It is better than nothing," he said of his one-time compensation of $5,000, adding that he moved in there two years ago. "But it is not enough to renovate a new place and start all over again."

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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