Laguna Park condo looking to get majority vote to push through en bloc sale

Laguna Park condominium along Marine Parade Road could be up for collective sale. It’s not yet a done deal but about 77 per cent of tenants there have agreed to it.

The sales committee could expect a few more signatures in the coming days to cross the 80 per cent trigger which will move the en bloc process forward.

Laguna Park has already engaged an agent to market the 99-year leasehold property, which has 528 units.

Channel NewsAsia understands the asking price is about S$1.2 billion.

Each owner stands to pocket between S$1.8 million and S$2.1 million if the deal goes through.

It works to about S$633 per square foot of gross floor area.

Nicholas Mak, director, Consultancy and Research, Knight Frank, said: “I think the figure of S$1.2 billion was derived somewhere in 2007 when the en bloc sale market was still very buoyant. In today’s market, the owners will probably have to lower their expectation, easily by 20 per cent or so.”

The en bloc market has slowed significantly.

Last year, there were 104 successful collective sales transactions. This year, it’s just seven and the trend will likely continue next year.

Given the sheer size of the development, the bidder for Laguna Park will likely need several partners to join in as well.

Laguna Park condominium sits on 667,000 square feet of land with a plot ratio of 2.8.

Analysts said that based on the plot ratio and land area of Laguna Park, a developer will be able to build between 1,200 and 1,500 units of new homes there. That could pose a challenge as the developer may have to phase out its marketing efforts over a year incurring a fair amount of cost in the process.

Mr Mak added: “Another challenge facing the en bloc market is actually difficulty in raising financing from the banks because the banks are in a tight situation and they would also be looking at any sort of massive borrowing very conservatively.”

Observers said given the quiet market, developers could have little appetite for collective sales.

But some may still grab a good bargain if the price is right.

Source : Channel NewsAsia – 11 Dec 2008

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