Yuen Sing Mansion, a freehold collective sale site at Nos. 6A – 10C Geylang Lorong 13, has just been launched for sale by tender by sole marketing agent, JLL. The four-storey development comprises nine apartments built on a regular shaped plot. All the owners of the freehold collective sale site have consented to the collective sale and no Strata Titles Board approval would be required.
Under the 2014 Master Plan, the 7,868 sq ft site is zoned ‘Residential/Institution’ with a gross plot ratio of 2.8 and an allowable height of up to 8 storeys (subject to 26m Above Mean Sea Level). A developer can potentially configure the allowable GFA of 24,235 sq ft up to 29 apartments based on the Urban Redevelopment Authority’s grant of outline permission recently. The freehold collective sale site is not subject to Pre-Application Feasibility Study on traffic impact based on a reply from the Land Transport Authority.
Nestled in a convenient locality with a rich cultural heritage and vibrancy, the plot has easy access to many entertainment and dining options in the Geylang area. It also enjoys excellent public transport accessibility with the Aljunied and Kallang MRT Stations being within an 800m and 850m walk respectively. For a host of services, shopping and leisure activities, Paya Lebar Centre, Singapore Sports Hub, the Central Business District as well as future Kallang Riverside are all within a short five to 10 minutes’ drive from the freehold collective sale site.
In addition, the freehold collective sale site is in close proximity to established primary and international schools. The popular Geylang Methodist Primary and Secondary School is within one kilometre of the site. Other popular schools within two km of the site include Kong Hwa School and Canossa Catholic Primary School. James Cook University and Nexus International School are also located in the vicinity.
The owners of the freehold collective sale site are expecting bids in excess of $17 million.
This reflects about $779 per sq ft per plot ratio (psf/pr) or $753 psf/pr after factoring in the 10 per cent bonus balcony and a corresponding estimated development charge of about $1.24 million.
“The site’s locational attributes would appeal to small and mid-sized developers looking for centrally located small development plots in areas with good growth potential. The subject location would extend seamlessly and benefit from the Kallang Riverside Rejuvenation Plans by the Urban Redevelopment Authority”, said Mr. Tan Hong Boon, Regional Director of Capital Markets at JLL, Singapore.
The tender for Yuen Sing Mansion closes on Tuesday, 23 October 2018, at 2.30 p.m.
Mr Paul Ho, chief mortgage consultant of iCompareLoan noting that there is 100% consent to the en bloc sale for the freehold collective sale site – and so requiring no Strata Titles Board approval – shows that the owners have acted quickly and decisively.
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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