SINGAPORE – Farrer Road freehold development Tulip Garden has sold for S$906.9 million, making it the second-largest en bloc deal so far this year.
The sale price is 20.4 per cent higher than its asking price of S$753 million. Owners of the 162-unit development, consisting of apartments, maisonettes and two shop units, will each net S$4.3 million to S$7.6 million, marketing agent Colliers International announced on Thursday (April 12).
Clinching the deal was Asia Radiant, an entity jointly held by MCL Land and Yanlord Land Group.
The sale price works out to a land rate of S$1,790 per square foot per plot ratio (psf ppr), which surpasses that of recent collective sale transactions in the area, such as Hollandia (S$1,703 psf ppr), and The Estoril (S$1,654 psf ppr), said Colliers International.
The largest en bloc deal this year was Pacific Mansion at River Valley Close, which was sold for S$980 million last month (about S$1,806 psf ppr, inclusive of a 10 per cent bonus gross floor area for balconies) to a consortium formed by Guocoland (Singapore), Intrepid Investments and Hong Realty.
Experts say the collective sale market is expected to continue in its exuberance, and more record deals could be inked.
While the owners of a 1,701 square feet Tulip Garden unit will reap about S$4.3 million from the sale, a unit of the same size in the estate sold for about S$2.1 million only a year ago.
The latest sale reflects developers’ keen interest and deals worth over S$900 million or S$1 billion will “not be rare”, said ZACD Group executive director Nicholas Mak.
Mr Mak estimates a break-even cost for the Tulip Garden site to be S$2,420 to S$2,500 psf.
Mr Alan Cheong, senior director at property research and consultancy Savills, expects collective sale prices going forward to be “rewritten”. However, the fact that Tulip Garden and Pacific Mansion were clinched by joint ventures shows developers are mitigating their risks, he said.
Mr Mak said the joint ventures were due to the sheer size of the developments and prices involved. “Once tenders go above S$800 million, typically it would be submitted by a joint venture or consortium,” he said.
The Tulip Garden site spans 316,708 square feet in land size and is a residential zone with a gross plot ratio of 1.6, with an allowable height of up to 12 storeys.
Colliers International managing director Tang Wei Ling said the site was appealing because of its large contiguous land area, which will offer greater flexibility in the planning and development of the new residential project.
It was Tulip Garden’s fourth en bloc attempt and unit owners are “extremely delighted” by the sale price, which exceeded expectations, said Mr Ng Kee Wah, chairman of its collective sale committee.
The collective sale tender was launched on February 28 and closed on April 11.