Fresh en bloc bid by condo in Cavenagh Rd

Straits Times: Thu, Sep 22
THE Cavenagh Gardens condominium near Orchard Road is up for collective sale with an expected price of between $480 million and $500 million. Owners stand to reap between $2.5 million and $3 million each for their units – 35 to 45 per cent more …

THE Cavenagh Gardens condominium near Orchard Road is up for collective sale with an expected price of between $480 million and $500 million.

Owners stand to reap between $2.5 million and $3 million each for their units – 35 to 45 per cent more than if they sold their homes individually, said marketing agent PropNex yesterday.

The expected price is between $1,620 per sq ft per plot ratio and $1,688 psf ppr for the 130,000 sq ft site. This includes the additional 10 per cent balcony allocation.

If adjoining parcels of state land are included, the freehold site in Cavenagh Road could increase to 150,000 sq ft and bring the price down to $1,413 psf ppr to $1,471 psf ppr.

Cavenagh Gardens consists of 172 homes spread across two 13-storey towers and a five-storey block. The estate in Cavenagh Road could be redeveloped into 350 units of 1,000 sq ft each.

This is at least the third time the development has been up for collective sale. Owners wanted $619 million in October 2007 but dropped that to around $450 million in June 2008 amid the global financial crisis.

PropNex added that developers can apply to retain the towers and develop them with additions and alterations.

While the estate is in a prime area, a successful deal might be hard to pull off as collective sales of more than $500 million, including those of Pine Grove, Pearl Bank Apartments, Tulip Garden and Hawaii Tower, have failed to find buyers.

Developers have shunned large projects in favour of less risky investments of less than $100 million. A big supply of state land released has also siphoned capital away from the en bloc market, say experts.

‘With the influx of foreign investors and the interest of high-end home buyers, this land site has (many) opportunities,’ said Mr Charles Chua, head of PropNex investment sales department.

‘(It can) be developed into high-end residences, serviced apartments or small office, home office apartments.’

He added that the project’s price of about $1,620 psf ppr is ‘reasonably attractive’. By comparison, the collective sale of nearby Cairnhill Mansion has a reserve price of about $2,308 psf ppr.

The breakeven price of a re-developed Cavenagh Gardens is estimated to be between $2,138 and $2,223 psf ppr or reduced to $1,950 to $2,028 psf ppr if adjoining state land parcels are included.

But the selling price is expected to range from $2,500 psf to $2,600 psf in both cases, Mr Chua noted.

Nearby 200-unit Waterscape at Cavenagh was launched at an average selling price of about $1,880 psf in March last year. About 75 per cent of the units have been snapped up.

The average transacted price for two units sold in May and June this year was $1,939 psf, according to caveats lodged with the Urban Redevelopment Authority.

Mr Tan Kok Keong, OrangeTee’s head of research and consultancy, said developers’ risk appetite has decreased further amid global market uncertainties.

Smaller sites are still preferred as they also require a shorter time to be launch-ready, reducing the risk.

‘The sale of bigger prime collective sales can still take place but the unsold inventory in the market must first be cleared before developers’ appetite for these large sites comes back,’ Mr Tan said.

‘Even with the Government’s bumper supply of state land, collective sales are still the main way for developers to get prime freehold sites.’

esthert@sph.com.sg
Source: The Straits Times © Singapore Press Holdings Ltd

About Propertyguru Expert

Website contend is hand picked and high demand. Marketing Manager at Huttons Asia Pte Ltd. Indonesian Focusing in Private Residential Singapore. *Service Quality Assured. *Top 300 producer in 2011.