Pine Grove, Source Google Maps

Pine Grove moves nearer to securing mandate to relaunch collective sale at $1.78b

Pine Grove’s collective sale committee (CSC) is making progress toward obtaining the necessary 80% mandate to relaunch a collective sale at a reduced reserve price of $1.78 billion. Over 60% of the 660-unit condominium’s homeowners have signed a supplemental agreement supporting the lower reserve price on Feb 19.

The former HUDC estate, located in Ulu Pandan with 59 years left on a 99-year lease, initiated its fourth collective sale attempt since 2008, setting a public tender price of $1.95 billion in September 2023.

Following the November 2023 tender closure without any bids at $1.95 billion, the CSC aimed to secure the 80% mandate for a relaunch at $1.78 billion on March 6. About 46% of owners gave their consent during an extraordinary general meeting on Jan 21.

The revised reserve price of $1.78 billion represents an 8.7% reduction, offering developers and investors an opportunity to acquire a substantial development site near the Dover forest and Dover MRT station.

In the event the CSC obtains the 80% mandate before March 6, the tender will be relaunched at $1.78 billion. If the mandate is not secured by then, the relaunch will be at the original $1.95 billion. Even if the mandate is not acquired by March 6, efforts will continue to obtain it by the tender closing on May 5.

Developers had previously indicated their willingness to consider a lower price, and if the bid reaches $1.78 billion, the offer will be presented to owners with the hope of securing the mandate by mid-July 2024 to finalize the deal.

Successful completion of the collective sale could result in gross proceeds of about $2.19 million for owners of 1,163 sq ft units, $2.69 million for 1,690 sq ft units, and $2.9 million for 1,938 sq ft homes.

The land rate at $1.78 billion works out to $1,335 per sq ft per plot ratio, factoring in a 10% bonus gross floor area, an estimated land betterment charge (LBC) of $975 million for intensification, and a lease upgrade to a fresh 99-year one. The LBC may see revisions on March 1, 2024.

The recent adjustments to additional buyer’s stamp duty (ABSD) remission clawback for residential projects could benefit developers, making large collective sale sites like Pine Grove more appealing. The revised ABSD rates apply to projects with at least 90% of units sold within the five-year sale timeline, potentially reducing the clawback rate for developers.

The Straits Times

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