A rare residential redevelopment site, Laguna Park, is up for collective sale, announced Knight Frank Singapore on 18 September. Knight Frank, the exclusive marketing agent representing the interests of the owners of Laguna Park via their collective sale committee, said the high-rise site off Marine Parade Road, offers panoramic sea views and is set to have an MRT station (under-construction) at its doorstep.
Laguna Park is a 99-year leasehold private residential estate comprising seven residential blocks of 506 apartment units, 10 penthouses and 12 commercial units, and has a site area of 62,197.25 sq m (approx. 669,484 sq ft).
The rare residential redevelopment site is largely regular and enjoys dual frontage onto Marine Parade Road and Siglap Link.
Under the 2014 Master Plan, the site is zoned “Residential” with a Gross Plot Ratio (GPR) of 2.8 and can yield approximately 1,874,557 sq ft of Gross Floor Area (GFA) upon redevelopment. Based on the potential GFA and assuming an average unit size of 70 sq m, there is potential for 2,487 new residential units upon redevelopment. The owners have engaged a traffic consultant to conduct a Pre-Application Feasibility Study (PAFS) to assess the traffic impact on the area and propose car-lite initiatives, traffic demand management measures and/or feasible transport improvement plans to support the redevelopment proposal for the site, as required by the authorities.
Major arterial roads as well as expressways such as Marine Parade Road, East Coast Road, and East Coast Parkway (ECP) provide seamless connectivity to other parts of Singapore. The site is also a brisk 15-minute drive to the Central Business District and Changi International Airport.
Owners of the rare residential redevelopment site can enjoy a leisurely walk along Siglap Link Park towards Upper East Coast Road for grocery shopping at the supermarket, or be spoilt by a wide variety of dining options that the area offers. The upcoming Siglap MRT Station, situated at the door step of Laguna Park, will enhance the connectivity of the site when it is completed in 2023. East Coast Park, which offers a wide array of sporting, dining and recreational activities, is accessible via an underpass adjoining the site.
The reserve price for the rare residential redevelopment site is $1.48 billion.
Inclusive of an additional differential premium of approximately $453.5 million for the intensification of the site to a plot ratio of 2.8 under URA’s 2014 Master Plan and a lease top up premium estimated at $416.1 million for a fresh 99-year lease, this translates to a land rate of $1,253 psf ppr, subject to authorities’ approval.
“Laguna Park is possibly the first and only en bloc site to be launched for collective sale offering both panoramic sea views and the convenience of an MRT station entrance (U/C) at its door step. The completion of a new MRT station by 2023 should tie in perfectly with the completion of the new development as well. Additionally, the pipeline of new residential projects in the immediate vicinity of Laguna Park is limited in the foreseeable future,” says Mr Ian Loh, Executive Director and Head of Investment and Capital Markets, Knight Frank Singapore.
The tender for the rare residential redevelopment site will close on 1 November 2018, Thursday at 3.00 pm.
Mr Paul Ho, chief mortgage consultant of icompareloan.com, said whatever decision owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners. One way he said was to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
As collective sale process takes 20 to 30 months to complete, during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
Mr Ho pointed out that the rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
He said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
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