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Pine Grove Condominium’s Collective Sale: Seeking Mandate for a Strategic Relaunch at $1.78 Billion

The collective sale committee at Pine Grove condominium is actively seeking a mandate from owners to relaunch the collective sale with a revised reserve price of $1.78 billion. After the initial tender closed without bids at $1.95 billion, ERA Realty Network, in private treaty discussions with potential buyers, proposes the adjusted price following a fair valuation by Premas, a unit of Cushman & Wakefield.

Key Information:

  1. Previous Tender and Discussions:
    • The initial public tender at $1.95 billion in November 2023 yielded no bids.
    • ERA engaged in private treaty discussions with interested parties post-tender.
  2. Revised Reserve Price:
    • Aiming for a fair valuation, the new reserve price is set at $1.78 billion.
    • Premas conducted the assessment, considering the redevelopment potential into a 2,050-unit development.
  3. Developer Interest and Upcoming Tender:
    • Several developers have informally expressed interest at the specified valuation.
    • Efforts are underway to secure the necessary 80% consensus before the tender deadline in mid- to late March 2024.
  4. Extraordinary General Meeting (EOGM) and Signing Session:
    • An EOGM on Jan 21 will assess owners’ interest in relaunching the collective sale.
    • Signatures gathered during the session will gauge the initial interest level at the new reserve price.
  5. Potential Gains for Unit Owners:
    • At $1.78 billion, land rate is $1,335 per sq ft per plot ratio (psf ppr).
    • Owners of different-sized units stand to gain substantial proceeds.
  6. Comparison with Nearby Developments:
    • Pine Grove’s land rate is competitive compared to recent Government Land Sales (GLS) sites.
    • Recent GLS sites saw lower land rates per sq ft per plot ratio.
  7. Challenges in Collective Sale Market:
    • The collective sale market faces challenges, with only three deals worth $574 million concluded in 2023.
    • Higher development risks, mismatched price expectations, and changes in floor area definitions contribute to the market stalemate.
  8. Policy Changes Impacting Expectations:
    • The harmonisation of floor area definitions, effective from June 1, 2023, has affected the saleable area and margins for developers.
    • En bloc owners have raised their asking prices due to surging private home prices, leading to a mismatch in expectations.
  9. Pine Grove Background:
    • One of the first HUDC estates privatized in 1996, Pine Grove holds significance in Singapore’s property landscape.

As Pine Grove condominium seeks a fresh mandate for a strategic relaunch, the revised reserve price positions it competitively in the evolving real estate market, offering a potential win-win for both owners and developers.

The Straits Times

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