Each owner gets $4m – 2 to 3 times what they would have made if they sold separately
IT TOOK 18 months but the owners of 15 terrace houses in Balestier have pulled off a sweet deal to match some of the collective sales that have been making headlines all year.
They have banded together to sell their properties for $61 million, giving each a payout of about $4 million.
This is two to three times what they would have made for their homes individually and a huge gain for those who bought several years ago.
It is quite a coup given that the deal was trickier than the usual collective sale and the fact that the once roaring en bloc market has cooled considerably since tougher rules were put in place last month.
The quieter market made the sale of the 15 terraces in Jalan Bunga Raya quite an achievement, said Mr Shaun Poh, senior director for investment advisory services and auctions at DTZ Debenham Tie Leung, which marketed the houses.
The mostly two-storey homes are not strata-titled as in a typical condo. This meant every owner had to agree to sell, unlike in a strata development where only 80 per cent of owners have to agree.
While similar deals have been sealed before, getting 15 out of 15 owners to sign the deal ‘was a challenge’, Mr Poh said. ‘If anyone doesn’t sign, that’s it. No deal.’
DTZ worked for about 18 months to collect all the signatures, he said.
The offer proved too sweet to resist for owners such as housewife Virgie Orlino, 47, who was initially reluctant to sell her house, which has been home for about 14 years.
‘We didn’t want to sell, but the rest wanted to sell, so we decided to cooperate,’ she told The Straits Times, adding that the price was ‘not bad’.
For some owners, who bought their homes more than 10 years ago, the payout represents a real windfall.
Retiree Ho Chaw Fu, 70, is ‘very happy with the price’. No wonder: Mr Ho bought his house for $300,000 about 30 years ago.
He may not be alone. Although one or two of the homes – lined up in two rows along a cul-de-sac – appear recently renovated, others look decades-old.
Despite acrimony being the word of the day for many other collective sales, the Balestier terraces deal went quite smoothly, owners said.
One owner, who did not want to be named, said people in the street ‘get along very well’ and were ‘very cooperative’ about the sale. He added that a few were planning to relocate together to another area so they could still be neighbours.
A reason for all this harmony could be the good price the sellers fetched. It works out to $739 per sq ft (psf) of potential gross floor area – a record level for Balestier, said Mr Poh.
The Balestier area has seen keen interest from developers such as City Developments and Soilbuild, which have both picked up projects in the vicinity recently.
The buyers of the terraces are understood to be a Chinese property developer and its Singaporean partner.
They were awarded the properties on the very day the tender closed, which means their bid was fairly strong.
They can build up to 36 storeys on the site, which has a plot ratio of 2.8.
About 56 apartments can be built with an average size of 1,500 sq ft each and may eventually be sold at $1,400 to $1,500 psf.
The developers also get the road itself, which they can keep or use as development land.
A similar deal was sealed last year when owners of some bungalows in Bukit Timah teamed up to sell their properties and developer Simon Cheong bought a group of 16 terrace houses in Cairnhill last year.
Source: The Straits Times 21 Nov 07