The Straits Times | Posted: 29 March 2013
The Shunfu HUDC development along Marymount Road has finally been privatised - almost 12 years after it first made the attempt.
The first try in 2001 failed because only half the residents backed the idea.
The conversion to a strata-titled estate - it means owners now hold title to their units as well as the common property, such as carparks and open landscaped areas - clears the way for a potentially lucrative collective sale.
Buyers have already been factoring the change with flat prices hitting record highs in recent months.
The median resale price of the 358-unit development exceeded the $1 million mark in the third quarter of last year for the first time.
A record price of $1.33 million for a 1,660 sq ft maisonette was also inked last November.
The project on a 38,000 sq m site has about 72 years left on its lease.
The site is in a central and prime area next to Marymount MRT station and is likely to interest developers.
Mr Karamjit Singh, Jones Lang LaSalle's head of investments and residential, noted that while the plot is significantly larger than typical government land sales sites, it is smaller than other HUDC estates. This could be an advantage if it goes for a collective sale.
The smaller size will mean a lower investment quantum and less development risk - a key point with builders following recent law changes.
Developers now have to build and sell all units in a project within five years to avoid paying an additional buyer's stamp duty of 10 per cent. A larger site that can yield more units makes this increasingly challenging.
Shunfu can be redeveloped into 1,000 units of about 1,100 sq ft each, Mr Singh estimates.
"Developers who might be interested are likely to be larger ones in the top league or a consortium of developers," he added.
Mr Stephen Lim, 55, who has lived in the estate for almost 20 years, said most of the residents were looking forward to the privatisation.
"The wear and tear is setting in so renewal is needed and we're looking forward to a possible collective sale," he added.
"But this is a nice area and the neighbours were discussing the possibility of allowing current residents to have first picks of the new project if the collective sale goes through."
HUDC flats were built in the 1970s and 1980s as an option for middle-income citizen families. The Housing Board phased out building them in 1987 as demand fell.
Privatisation was then introduced for these estates in 1995 to give the owners control over their homes. Once owners of at least 75 per cent of the flats support privatisation, the leases can be converted to strata titles.
There are 18 HUDC estates comprising 7,731 residential and 23 shop units. All but Braddell View have been privatised or identified for privatisation.
Former HUDC estates that have been redeveloped include Farrer Court - now CapitaLand's d'Leedon - and Amberville, now known as Silversea by Far East Organization.
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