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Property News13 Sep 2018

No go for two big collective sale attempts: Horizon Towers and Faber Garden close without sale

ST 20180913 GLFABER13 4275553

Two high-profile collective sale attempts, with asking prices of more than $1 billion, have closed without a sale.

Horizon Towers, a 99-year leasehold condominium at Leonie Hill, launched for sale at a reserve price of $1.1 billion just before the July 6 cooling measures were announced. The tender closed yesterday without a sale.

In late May, freehold Faber Garden's $1.18 billion collective sale tender also closed without a sale.

Both Horizon Towers and Faber Garden had been contenders for the largest collective sale this year, if successful.

According to Colliers International's data as of Sept 9 this year, 47 collective sale projects' tenders closed without a buyer. Of that, 19 had closing dates after the cooling measures were announced, said its head of research for Singapore Tricia Song.

Mr Tan Hong Boon, regional director of JLL, which is marketing the 211-unit Horizon Towers, said it was "not unexpected" that its tender closed without a sale.

Even before the cooling measures, things were already slowing. The Hungry Ghost festival has just ended, so developers are watching how the new launches will do in terms of sales volume and price levels," Mr Tan told The Straits Times yesterday. "We are now entering the 10-week private treaty period. If within 10 weeks we cannot find a buyer, we will have to launch another tender," he added.

Savills Research senior director Alan Cheong said: "It's a function of the cooling measures. A lot of developers are now more concerned with clearing their inventory than taking on new landbank. But if one or two deals can still go through in the coming weeks, then the market will be reinvigorated."

The Straits Times understands that Faber Garden's collective sale committee is evaluating its options and may launch a new tender in due course. Its collective sale agreement is valid until March next year.

Some analysts believe its tender process may have been affected by a new rule mandating that potential buyers must submit a pre-application feasibility study to the Land Transport Authority (LTA) assessing the traffic impact of redevelopment on the neighbourhood and proposing measures to manage traffic demand.

Developers must obtain LTA clearance for collective sale projects completed after November last year.

Under the rule, developers intending to build 700 or more units must prepare a Transport Impact Assessment.

Based on a 70 sq m guideline, the 236-unit Faber Garden condo off Upper Thomson Road can yield more than 1,150 units.

The sprawling 544,738 sq ft site at Angklong Lane is located near the Central Nature Reserve and Windsor Park's Good Class Bungalows and private condominiums. It has a plot ratio of 1.6 and a height restriction of 12 storeys. The maximum allowable gross floor area is 871,581 sq ft.

The total development charge payable is about $106.7 million, which includes $52.8 million in charges payable for intensifying the gross floor area. Including the development charge, the land price works out to $1,414 per sq ft per plot ratio.

The new cooling measures have also injected a big dose of uncertainty into the market.

Land acquisition costs shot up overnight, with developers having to pay 30 per cent additional buyer's stamp duty on land - of which 25 per cent is remissible if the developer can build and sell all units in the project within five years of buying the site.

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