Mandarin Gardens seeks $2.45 billion collective sale

Mandarin Gardens seeks $2.45 billion collective sale

With an eye-popping reserve price of $2.45 billion and sprawling over one million sq ft, Mandarin Gardens could be a tough sell.

But if the nation's largest residential collective sale deal ever materialises, it will likely involve several developers joining hands - including perhaps a foreign developer.

Owners of the 1,006-unit condominium in Siglap Road could each pocket between $1.58 million and $5.07 million, said Mr Raymond Khoo, business development director and division director for marketing agent C&H Realty.

"We are not only concentrating on local developers - they might come in on a joint venture, but we are eyeing foreign developers because they have the deep pockets and strong financial muscle," he said.

"In particular, Chinese developers might want to showcase what they have done in Johor Baru and want to bring it over to Singapore."

Head of research and consultancy at JLL Singapore Tay Huey Ying said a joint venture would be "highly likely" for Mandarin Gardens, given previous billion-dollar residential development land deals.

These include the Farrer Court collective sale site, purchased in 2007 for $1.34 billion by CapitaLand, Hotel Properties and US-based Wachovia Development.

Aside from the hefty price tag and additional charges such as the lease top-up, experts said, a key risk is the additional buyer's stamp duty of 15 per cent on the land cost of a project that developers are required to pay unless they build and sell all units within five years.

Experts said Mandarin Gardens could yield between 3,000 and 4,200 units.

Meanwhile, many local developers have already stocked up on their landbanks in the recent collective sale frenzy, CBRE Research's head of Singapore and South-east Asia Desmond Sim said.

Foreign developers with deep pockets will be more likely to stomach the risk and want to bid for the land, said experts.

Said Edmund Tie & Co research head Lee Nai Jia: "Foreign developers are used to building big developments, and so Mandarin Gardens may not seem that big to them."

Foreign names could include Qingjian Realty, Hong Kong-listed Chinese developer Logan Property and Chinese conglomerate Nanshan Group.

Still, headwinds for Mandarin Gardens lie ahead, Mr Makof ZACD group warned, including the challenge of getting 80 per cent of owners' signatures required. An extraordinary general meeting will be held on March 25 .

Mr Khoo said a major draw is that Mandarin Gardens boasts one of the last sea-facing locations in Singapore.

Mandarin Gardens is also located close to the upcoming Thomson-East Coast Line and established schools such as Tao Nan School and Victoria Junior College. - THE STRAITS TIMES