Entities controlled by Singapore property tycoon Kwek Leng Beng and his Malaysian billionaire cousin Quek Leng Chan have joined forces for the $980 million purchase of a freehold site in Singapore's upscale River Valley precinct.
Their acquisition of Pacific Mansion in District 9 marks the biggest collective sale in more than a decade and the second-highest on record, according to CBRE, which brokered the deal.
Singapore-listed GuocoLand, controlled by Mr Quek, announced yesterday that it has successfully tendered for the site with Intrepid Investments and Hong Realty.
Both Intrepid Investments and Hong Realty are majority-owned by Hong Leong Investment Holdings (HLIH), which is effectively controlled by Mr Kwek, though other family members also own stakes in these companies.
GuocoLand and Intrepid Investments each hold a 40 per cent stake in the project, while Hong Realty owns a 20 per cent interest.
The latest deal marks the largest transaction in the current collective sale cycle, exceeding Tampines Court's $970 million and Amber Park's $907 million, and is surpassed only by the sale of Farrer Court for $1.34 billion in 2007.
CBRE director of capital markets Galven Tan said that the tender for Pacific Mansion drew interest from a handful of local and foreign developers.
Consultants estimate that the land cost for the Pacific Mansion site may translate to a break-even price of $2,530 to $2,800 per sq ft (psf), and a potential selling price of $3,000 to $3,200 psf for the upcoming project.
In just the first three months of this year, 14 collective sales have clocked total proceeds of $5.6 billion, which is already 64 per cent of the total proceeds of $8.7 billion from 30 collective sale sites for the whole of last year.
As HLIH is deemed a substantial shareholder of GuocoLand, Intrepid Investments and Hong Realty are deemed interested persons of GuocoLand under Singapore Exchange's listing rules.
Pacific Mansion comprises 288 apartments and two commercial units. Owners representing more than 80 per cent of the strata area and share value of the development have consented to the collective sale. Each residential unit owner will stand to receive a gross payout of $3.26 million to $3.48 million. The shop units will receive between $2.2 million and $4.5 million.
Retiree Peter Chia, 60, who has been living in Pacific Mansion for the past 10 years, welcomed the news of the collective sale.
"It is a good price," he said, adding that he has not decided where he will live in the future.
He said a new development could help breathe new life into the area, noting that the ageing property was not well-maintained.
But not everyone is glad. A resident, who wanted to be known only as Mr Lim, said he bought a three-bedroom apartment in Pacific Mansion in 2016 and would incur a 12 per cent seller's stamp duty (SSD).
He said he has failed to get an SSD waiver from the authorities even though he did not sign on the collective sales agreement. The SSD, estimated to be $384,000, would have to be paid even before he receives the sale proceeds. "This defeats the purpose of the SSD because I am not a speculator," said Mr Lim, adding that he spent $40,000 to $50,000 on renovations.
Adapt From: Straitstimes.com 20 March 2018