Tampines Court collective sale mired in technical hitches

This article is more than 12 months old

Developer awaits Planning Permission approval and road improvements

Home owners at Tampines Court may have thought that their collective sale was sewn up when a buyer was found, but the deal has become mired in technical hitches.

The process is believed to have been delayed as developer Sim Lian Group awaits Planning Permission approval from the Urban Redevelopment Authority (URA).

The firm is also engaged with the Land Transport Authority (LTA) over its proposal to upgrade two existing road junctions and build a new link to the slip road leading to the Pan-Island Expressway.

These road improvements are needed so the developer can increase the number of units from 560 now to about 2,000.

But Sim Lian will have to sacrifice about 6 per cent to 7 per cent of the 702,164 sq ft of land to build the slip road.

It was awarded the site last August and submitted its planning proposal last December.

Meanwhile, Tampines Court home owners worried at the lack of updates about the collective sale process have been demanding to know if the sale is still on and whether they can collect their sales proceeds in April.

Mr Desmond Sim, CBRE Research head of Singapore and South-east Asia, said the technical issues have arisen because the market is now focused on intensifying the number of dwelling units rather than the plot ratio.

"Usually when you increase the plot ratio, you have to pay a development charge, which is a betterment levy paid to the state for it to improve the infrastructure to cope with the increased density," he said.

"But now, the market is not driven by an increase in plot ratio, but predominantly by an increase in number of units; some developers do not even increase their gross floor area.

"That is why the Government needs the traffic study, because more units mean more cars per development, and that is going to put a lot of pressure on road infrastructure."

Last November, a new rule stipulated that potential buyers, developers and real estate agencies must submit a Pre-Application Feasibility Study to the LTA assessing the traffic impact of any redevelopment on the neighbourhood and proposing measures to manage traffic demand.

Developers need to do this before they submit development applications to the URA.

Mr Norman Ho, a real estate lawyer at Rajah & Tann, said not everything can be buffered against in contractual clauses.

"For the building of roads, this is the directive of the authorities to serve the new development, and it may be difficult for the purchasers to agree to have the qualification."

So it is "not usual" for lawyers to include clauses that allow developers to abort the deal should ancillary infrastructure work prove too extensive.