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Mandarin Gardens fails in its attempt to sell en bloc

This article is more than 12 months old

Despite high $2.9b asking price, only 68 per cent of units supported the attempt

Mandarin Gardens in Siglap has failed in its attempt to sell en bloc, despite a record high asking price of $2.927 billion.

On Sunday, the day the collective sales agreement expired, it had been signed by only 68 per cent of the units, below the 80 per cent required for the land to be put up for sale.

The property's collective sales committee (CSC) chairman Vincent Teo said in a letter to owners that while the committee would be dissolved yesterday, he hoped those who had signed the current agreement would support an attempt to form a new committee.

"This being our first attempt at collective sale, we have learnt valuable lessons which will certainly be very helpful in our next journey," he said.

An attempt in 2008 failed before a collective sale agreement was prepared, as the global financial crisis began, he said.

Last month, the 1,017-unit leasehold condominium raised its asking price to $2.927 billion to encourage more owners to agree to the collective sale.

It first raised its asking price to $2.788 billion in November last year from $2.479 billion after owners discovered that the land parcel was undervalued.

If the collective sale had gone through, it would have been the biggest transaction in dollar terms struck here.

Prospects for such mega sites may have cooled. A number of big projects closed their tenders recently without any bids.

These include Horizon Towers, which closed on Jan 28 after it had launched for a second time at the same reserve price of $1.1 billion.

Still, some are trying their luck - Braddell View, Singapore's largest private residential site, will be launched for collective sale by public tender tomorrow at a reserve price of $2.08 billion. The tender for the largest of Singapore's 18 former Housing and Urban Development Company estates will close at 3pm on May 28.

Mandarin Garden's Mr Teo said in his letter that the general feeling is that current market sentiment for collective sales is heading south, as evidenced by a lack of bids in the recent tender process of several large estates.

But he noted that should market sentiment permits, a fresh collective sale process can be initiated without having to wait for a two-year lapse period, if 50 per cent of owners by share value sign a requisition for a general meeting to form a new CSC.

Property expert Nicholas Mak, who is the executive director of ZACD Group, said that as Mandarin Gardens is such a large site, it would be an uphill task to get the required number of signatures for the collective sale agreement, compared with a small site of say, 30 units.

The cooling measures implemented by the Government last July "knocked the wind out of the sails of quite a few en bloc sales", he added.

Property