Shunfu Ville up for en bloc sale again with same reserve price

Singapore - JLL has relaunched the en bloc sale of Shunfu Ville near Marymount MRT Station after an attempt last year did not result in a sale.

However, there is no change in the reserve price by the owners at S$688 million, which works out to S$791 per square foot of potential gross floor area, inclusive of two payments to be made to the state - a differential premium for building a bigger project on the site and a lease-upgrading premium to top up the site's lease to 99 years. Still, JLL is hopeful of a positive outcome this time around.

It pointed to a few "positive signs" starting to emerge for the residential property market. Housing has become more affordable since 2008, when suburban private home prices were equivalent to nine to 10 years' income. Now the figure is about 5.6 years.

Moreover, developers remain hungry for land, as seen in the recent state land tender for a prime seaview site along Siglap Road. The 99-year-leasehold site received eight bids, with the highest at S$624.18 million or S$858 per square foot per plot ratio (psf ppr). This was the largest private condo site in the suburbs or Outside Central Region to be sold at a state tender in four years.

Yong Choon Fah, national director of capital markets at JLL, said this bodes well for Shunfu Ville, which has a central location amid an affluent population catchment, good MRT connectivity, nice views of MacRitchie Reservoir and golf courses, and good schools and malls nearby.

"Priced at a minimum of S$688 million, which reflects about S$791 psf per plot ratio, we believe it would be better received this time round than the first tender, when two letters of interest were received," she added.

Moreover, there has not been any Government Land Sales site within the Bishan/Thomson area for sale since the award of the Lorong Puntong site (now being developed into Thomson Impressions) in October 2014.

Shunfu Ville sold for $638 million

  • Shunfu Ville was sold to developer Qingjian Realty for S$638 million on Thursday, marking the largest collective sale since 2007.
  • This translates to a total land cost of S$747 per square foot per plot ratio on potential gross floor area, after factoring in differential premium payable to the state to top up the lease to a fresh 99-year lease and for intensification of the site.
  • The sale price is lower than the reserve price of at least S$688 million during a relaunch in January after a failed attempt last September.
  • Each owner stands to get around S$1.7 million, The Straits Times reported.
  • The site could potentially yield over 1,000 units with an average size of 1,000 sq ft.
  • The new project can rise up to 36 storeys. This will give the future condo project on the site nice views of MacRitchie Reservoir and the surrounding greenery.
  • Karamjit Singh, international director and head of investments and residential at JLL, noted that this is the second largest former HUDC estate sold collectively in absolute price terms as well as the largest enbloc deal in nine years.
  • "While the Shunfu Ville sale could spark some life back into the market, the supply of realistically priced collective-sale opportunities is a key challenge," said Mr Singh.
  • Going by the turnout for Shunfu Ville, most developers do not seem bullish. The site, first launched for sale last year, attracted two letters of interest - one of which was from eventual purchaser Qingjian Realty (South Pacific) Group.
  • It again attracted only two parties, including Qingjian, when the site was relaunched in January despite the land cost of about $747 per sq ft per plot ratio being quite reasonable, compared with recent sales nearby.
  • Would-be bidders were no doubt wary of the large site, given the law now that developers must build and sell all units on a site within five years or face paying Additional Buyer's Stamp Duty.

The first tender for Shunfu Ville closed on Oct 27 last year and the owners have up to July 10 this year to secure a buyer and submit an application to the Strata Titles Board (STB) for the approval of the collective sale. The court's approval will be required assuming unanimous consent of owners has not been secured by then.

Right now, owners controlling slightly over 81 per of share value and strata area in the development have given the nod for the collective sale. Located about 200 metres from the existing Marymount MRT Station on the Circle Line and about 600m from the future Upper Thomson MRT Station on the Thomson East-Coast Line, the 408,927-sq-ft Shunfu Ville site has a balance lease term of about 70 years.

The estate was built in the late 1980s by the former Housing & Urban Development Company (HUDC) and privatised in 2013. Under the Urban Redevelopment Authority's Master Plan 2014, the Shunfu Ville site is zoned for residential use with a 2.8 plot ratio (ratio of maximum gross floor area to land area).

Based on the reserve price, the estimated breakeven cost for the successful buyer should be around S$1,250 psf, with the new units expected to fetch an average price of S$1,400-S$1,450 psf, Ms Yong said.

Shunfu Ville is just one stop away from Bishan MRT Station and the conveniences of the Junction 8 mall. It is also within a 1km radius of Catholic High Primary. The latest tender for Shunfu Ville will close on March 10.

This article was first published on January 28, 2016.
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