Laguna Park has advantage over Pine Grove, say analysts

Pine Grove and Laguna Park (picture) are currently the two most expensive en bloc properties up for sale, costing about S$1.7 billion and S$1.33 billion respectively.

But analysts said Laguna Park’s sea view frontage along Marine Parade Road and its rectangle-shaped land plot put it in a more advantageous position over Pine Grove in terms of attracting potential developers to bid for the sites.

They added that Laguna Park is the only seafront land parcel available at the moment and its rectangle-shaped plot allows for a consortium of developers to divide up the land among themselves.

With a total area of 677,493 sq ft, Laguna Park is also considerably cheaper than Pine Grove.

Inclusive of the development charge of S$269 million and S$250 million of lease-top-up, it works out to S$1.85 billion or S$975 per sq ft per plot ratio.

Pine Grove, on the other hand, is located in Ulu Pandan and sits on an irregular-shaped plot of 893,219 sq ft.

Pine Grove will cost developers S$2.17 billion or S$1,152 per sq ft per plot ratio in total, inclusive of the S$460 million development charge.

“At the end of the day, it boils down to price,” said Ms Christina Sim, director of investment sales at Cushman & Wakefield.

“Laguna Park’s larger plot ratio allows the winning developer to build up to 36 storeys. Although it is a smaller plot compared to Pine Grove, the intensity to build is there. The buildable areas for both sites are about the same,” said Ms Sim.

For instance, with a land area of 677,493 sq ft and plot ratio of 2.1, the redeveloped Laguna Park is able to yield about 1,600 units at 1,200 sq ft each.

With a plot ratio of 2.1, Pine Grove is able to yield about 1,500 units at the same size per unit.

“Both properties have their own charm,” said Ms Sim. “Pine Grove is near the Buona Vista business parks and near Holland Village. But people will still pay for seafront views,” she added, citing East Coast property Silversea’s latest transaction prices of up to S$2,000 per sq ft.

Analysts have told MediaCorp previously that a reserve price with a discount of 20 to 25 per cent is more “realistic” for Pine Grove.

This translates to about S$1.275 billion to S$1.36 billion, or about S$924 to S$970 per sq ft per plot ratio.

With private property price growth moderating, Pine Grove’s massive size may also prove too risky for property developers, added analysts.

Pine Grove, which sits within a landed housing enclave, is likely to sell at a market range of S$1,400 to S$1,500 per sq ft, said analysts.

This is based on the nearby D’Leedon’s selling price of S$1,600 per sq ft. “D’Leedon has a price advantage because it fronts Farrer Road,” said Ms Sim.

Pine Grove’s marketing agent Jones Lang LaSalle did not provide MediaCorp with any update on any bids submitted but it has the until end of next month to negotiate a private treaty with interested parties.

Source : Today – 30 May 2011

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