Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Wednesday, February 29, 2012

New residential site for S’pore

Spring Grove being considered for collective sale but the process may be difficult

SINGAPORE: One of the largest residential sites in Grange Road could hit the market if talks between home owners and the US embassy are successful.

Spring Grove on the site of the former residence of the US ambassador is being considered for collective sale, although the process is likely to prove difficult due to the complex nature of the estate's ownership.

The 24,481-sq-m plot was acquired from the US government by City Developments more than 20 years ago and developed into a 325-unit condominium.

It has a 99-year lease that started on Dec 1, 1991. Ownership will revert to the US government which has freehold rights to the estate at the end of that period.

This is unusual as it is the government that usually sells 99-year leasehold sites in its land sales programme while holding its freehold interest.

In November, the embassy told a committee hoping to have the estate converted to freehold status that the “most appropriate way forward” for both parties would be through open bidding for their respective rights.

This would typically mean that the MCST subsidiary proprietors or home owners consider the potential of a collective sale, said the notice obtained by The Straits Times.

“The combined offer of vacant possession of land along with either long-term leasehold or freehold rights would be quite compelling, given the location and size of the estate in Prime District 9 and is likely, in our view, to offer the best possible returns to both parties in an open and transparent manner.” The notice also requested that home owners consider forming a sales committee for the estate.

Spring Grove's management committee chairman Parag Goradia said the sales committee would be formed after the estate's EGM in April. The block was expected to fetch “over a billion dollars” and was likely to come onto the market in the next six to 12 months, he added.

Goradia noted that most residents wanted to sell en bloc while the US government was still keen to divest its interest.

However, there are concerns from those who recently bought units there, as they would have to pay the sellers' stamp duty on a sale. Other owners want to continue to stay at Spring Grove.

Experts said a possible collective sale would involve a more complicated process.

Credo Real Estate managing director Karamjit Singh said home owners and the US government must first enter into a joint sale agreement to sell the freehold land and building and agree on the total sale price and how they would share the proceeds.

“While there are no precedents on sharing formulas between the home owners and the freehold interest owner in an en bloc sale there could be parallels drawn from how leasehold en blocs are priced against the top-up premium payable to the state,” he added.

Law firm Rodyk & Davidson partner Norman Ho said two separate tenders could also be conducted simultaneously: one for home owners collectively for the remainder of their 99-year lease and another on behalf of the US embassy, either for an additional leasehold interest or the sale of the estate's freehold right.

By The Straits Times

No comments: