Introduction
In a significant move in the Singapore real estate market, UOL and CapitaLand have successfully acquired the Thomson View Condominium for $810 million. This acquisition marks the largest en bloc deal of 2024, reflecting the ongoing dynamics in the collective sales market.
Background on Thomson View Condominium
Thomson View Condominium is a 99-year leasehold development located on Upper Thomson Road. The site spans 50,197 square meters and is zoned for residential use with a plot ratio of 2.1. This allows for a total gross floor area (GFA) of 112,792 square meters. The condominium comprises 200 apartments, 54 townhouses, and a shop unit.
Previous Attempts at En Bloc Sale
Thomson View Condominium has been previously marketed for en bloc sale on multiple occasions. The latest attempt before this acquisition was in February 2024, with a guide price of $918 million. However, the previous attempts have faced challenges, with the site being put up for sale in 2018, 2013, and earlier, but without success. The market for residential collective sales has been quiet over the past year, with several tenders closing without a sale.
Key Details of the Acquisition
- Reserve Price: The acquisition was made at a reserve price of $810 million, significantly lower than the previous guide price of $918 million.
- Land Rate: The land rate translates to $1,275 per square foot per plot ratio (psf ppr), including an estimated $630 million required to upgrade the lease to a fresh 99-year period and a land-betterment charge for the intensification of land use.
- Effective Acquisition Cost: The effective acquisition cost for Thomson View condo is approximately $1.55 billion.
- Redevelopment Plans: The authorities have advised that there is no objection to the proposed redevelopment of the condominium to yield 1,240 units, based on an average apartment size of 85 square meters. The developer also stands to gain from a 7% bonus GFA over and above the allowable plot ratio, which can be used for balconies.
Implications for Owners
Each unit owner stands to receive between $2.5 million and $4.39 million. The acquisition is expected to provide significant financial gains for the unit owners. However, it also raises concerns about the potential displacement of residents and the impact on the community.
Market Trends and Collective Sales
The collective sales market in Singapore has seen a mix of successes and challenges. While some deals have been successful, others have faced difficulties. The recent acquisition of Thomson View Condominium highlights the ongoing dynamics in this market.
Recent Collective Sales
- Thomson View: This acquisition marks the largest en bloc deal of 2024, following the successful sale of Pacific Mansion in 2023 for $980 million.
- Other Deals: Other notable deals include the sale of Pine Grove, which closed without any bids in May, and the sale of Meyer Park to a UOL-Singapore Land Group joint venture for $392.18 million in February 2023.
Conclusion
The acquisition of Thomson View Condominium by UOL and CapitaLand is a significant milestone in the Singapore real estate market. It underscores the complexities and challenges involved in collective sales, as well as the potential for substantial financial gains for unit owners. As the market continues to evolve, it will be interesting to see how future en bloc deals unfold.
Additional Information
- Thomson View Condominium: Located on Upper Thomson Road, this 99-year leasehold development is zoned for residential use with a plot ratio of 2.1.
- Redevelopment Plans: The site can be redeveloped into a project yielding 1,240 units, with an average apartment size of 85 square meters.
- Land Rate: The land rate translates to $1,275 psf ppr, including additional costs for lease upgrade and land-betterment charges.
This acquisition highlights the ongoing dynamics in the Singapore real estate market, particularly in the collective sales segment. It underscores the importance of careful planning and negotiation in achieving successful en bloc deals.
