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Former Shunfu Ville (Enbloc)

Shunfu Road,
122

Project Detail

Shunfu Ville tries for collective sale again

The Shunfu Ville en bloc sale late last month has given some owners of ageing homes hope that they can reap a collective sale bonanza. Property consultants said inquiries started coming in from estates shortly after the Shunfu Ville announcement, while efforts are already under way at other blocks.

“There is interest from developers, which is why we are stepping up our search for suitable engagements or projects,” said JLL international director Karamjit Singh, who brokered the Shunfu Ville sale and Thong Sia Building sale last year. The 358-unit privatised Housing and Urban Development Company (HUDC) estate near Marymount MRT station was sold for $638 million last month, the first en bloc sale in nearly a year and the largest since 2007. Each owner will pocket about $1.782 million, or nearly 50 per cent above the typical value of a unit on its own. It was a shot in the arm for an otherwise moribund en bloc sales market, with just mixed-use Thong Sia Building sold last year, for $380 million, and no en bloc sales in 2014. In comparison, a record $11.6 billion of collective sales took place in 2007 at the market peak.

Elsewhere, the Changi Garden condominium and a former HUDC project in Potong Pasir are already into the sale process. The collective sale committee at the mixed-development Changi Garden off Upper Changi North Road selected lawyers and a marketing agent last month. The 84-unit estate has tried going en bloc twice but came up short both times. Some residents of The Capri condominium in Stevens Road are also said to be exploring the option, having sent out invitations to quote.

Among privatised HUDC estates, the collective sale committee at Blocks 110 to 112 Potong Pasir Avenue 1 is collecting signatures from owners and has apparently obtained about 60 per cent of the required minimum 80 per cent approval.

 

The collective sale committee at former HUDC project Tampines Court is drafting a sale agreement, while residents of former HUDC project Eunosville are said to be considering reigniting the process. Both estates have attempted to go en bloc twice. The 560-unit Tampines Court was privatised in 2002 and the 330-unit Eunosville in 2011.

 

“Owners of privatised HUDC developments are under pressure as their estates grow older and the responsibility of upgrading rests on their shoulders now,” said Mr Lee Liat Yeang, a senior partner in the real estate practice group of Dentons Rodyk & Davidson.

 

“As time passes, the value of topping up the lease (of site) will go up and, correspondingly, the amount of money that goes to owners in an en bloc sale will come down,” added Mr Lee, who is acting for Qingjian Realty in the Shunfu Ville deal.

 

On the retail front, owners at Katong Shopping Centre have reached the 80 per cent mandate for a collective sale and are expected to launch the site soon. The landmark in the Katong area is zoned for commercial and residential use. Now may be a reasonable time to start a collective sale effort as the Government has been moderating its supply of land via its sales programme. Not all of the Government Land Sales (GLS) sites are attractive; they may be too big or highly contested, said Ms Alice Tan, Knight Frank Singapore’s research head. That said, the GLS programme for the second half of this year, likely to be announced this week or next, could offer developers attractive alternatives, according to Mr Desmond Sim, CBRE’s head of research for Singapore and South-east Asia.

 

While developers see the en bloc process as a viable source of well-located sites, they will be realistic in their offering prices, given building completion and sales deadlines imposed by the Qualifying Certificate and Additional Buyer’s Stamp Duty.

 

Eventually, it is about pricing, said Mr Shaun Poh, Cushman & Wakefield’s executive director of capital markets (Singapore), adding: “Developers are low on their land stocks so quite a number will be keen to restock. But they are also very mindful of whatever sales backlog they may have.”

$688m price tag for Shunfu Ville collective sale

Shunfu Ville, a 358-unit residential project in Upper Thomson, is up for collective sale with an asking price of at least $688 million.

 

It was built in the late 1980s by the former HUDC and privatised in 2013. More than 80 per cent of owners have agreed to the sale.

 

“Many residents have been living here a long time. Whether or not they are supportive of the collective sale bid, they all love the area – quiet, yet near town,” Mr Woo Hon Wai, chairman of the collective sale committee, told The Straits Times yesterday.

“But as an old estate, close to 30 years old, it’s reached an age where it needs to be rejuvenated.” The estate has ample untapped redevelopment potential and is close to top schools, including Catholic High Primary, Ai Tong School and Raffles Institution, he noted.

 

Shunfu has three 16-storey apartment blocks and three low-rise blocks of maisonettes. Given a plot size of about 408,927 sq ft and gross plot ratio of 2.8, the site could yield about 1,100 units with an average size of 1,000 sq ft, said marketing agent JLL.

 

“The new project could be the tallest residential development within its 1km radius, with breathtaking views all around, as the Master Plan 2014 provides for a building height of up to 36 storeys,” said Mr Tan Hong Boon, JLL regional director of capital markets.

 

With the minimum $688 million purchase price and another estimated $218 million in fees to the Government to top up the lease to a fresh 99 years and for intensifying land use, land rate would be about $791 psf per plot ratio (psf/pr) on the potential gross floor area.

 

Estimated break-even cost for an eventual project should be about $1,250 psf, said Mr Tan. “New units can expect to fetch between $1,400 psf and $1,450 psf.”

 

Shunfu owners can expect gross sales proceeds of at least $1.9 million per unit, or about 50 per cent more than what they can get by selling on the open market, he added. Mr Simon Ang, 50, who has lived in a four-bedder for about 10 years, said its age and maintenance issues are partly prompting him to sell.

 

His family of 12 includes three grown-up children who would like their own space. “Hopefully, we will be able to upgrade to a larger unit.”

 

Chestertons managing director Donald Han said developers may bear in mind the failed collective sale bid of nearby Thomson View Condominium, and therefore prefer Government Land Sales (GLS) sites involving fewer legal hurdles, or would want prices to factor in the added risks.

 

Nearby sites recently sold via the GLS programme include a 113,051 sq ft parcel in Lorong Puntong, off Sin Ming Avenue, which Nanshan Group bought for $173.57 million or $731.10 psf/pr in October 2013.

 

Shunfu Ville is about 200m from Marymount MRT station on the Circle Line and about 600m from the future Upper Thomson MRT station on the Thomson East-Coast Line, set to be ready in 2020.

The tender exercise for Shunfu Ville closes on Oct 27.

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