Click on Spanish Village up for collective sale at guide price of $882 million
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Author: Ravi Philemon
Edmund Tie & Company (ET&Co), the sole marketing agent for the collective sale of Spanish Village, said on Feb 11 that it is pleased to relaunch the freehold residential site for sale by tender. Built in the 1980s, Spanish Village comprises 226 apartments.
Spanish Village is strategically located along Farrer Road, a mature and affluent residential estate in prime District 10. Sitting on sprawling grounds of 30,793.4 square metres (sq m) or 331,457 square foot (sq ft), the elevated site presents an opportunity to create a landmark development amidst a prestigious enclave.
Situated close to the Singapore Botanic Gardens, a 158-year-old tropical garden and the country’s first UNESCO World Heritage Site, Spanish Village enjoys the tranquility and majestic views of the surrounding greenery. Under Master Plan 2014, the site is zoned for Residential use with a gross plot ratio (GPR) of 1.6.
The property enjoys seamless connectivity. It is well-served by major roads and expressways such as Farrer Road, Holland Road, Pan Island Expressway (PIE) and Ayer Rajah Expressway (AYE). It is a mere 10 minutes’ drive to the Orchard Road shopping belt and one-north, a research and development hub which will be designated as Singapore’s first drone estate. The CBD is just a 15-minute drive away. Farrer Road MRT station is approximately 275 metres from its doorstep as well.
Spanish Village has unrivalled convenience. Not only is it directly opposite the Empress Road Market & Food Centre with many affordable, local delights, but it is also within proximity to a vibrant mix of eclectic lifestyle destinations such as Holland Village, Chip Bee Gardens and Dempsey Hill.
The area is surrounded by renowned schools such as Nanyang Primary School (within 1km), Raffles Girls’ Primary School, Nanyang Girls’ High School, The Chinese High School, Anglo-Chinese School (International), Hwa Chong Institution and National Junior College. The National University of Singapore is also a short drive away.
A Pre-Application Feasibility Study (PAFS) was carried out by an appointed traffic consultant and an in-principle approval of up to 703 units has been obtained from LTA on 6 September 2018.
Despite the cooling measures introduced last year, the Collective Sale Committee (CSC) had come to a decision to launch the tender the third time as it is the final chance that Spanish Village, being a choice site with many positive attributes, can have a shot at the market this round.
The guide price for Spanish Village is $882 million, which reflects a land rate of $1,721 per sq ft per plot ratio (psf ppr) inclusive of a development charge of approximately $30 million.
ET&Co said that owners are in the process of signing a supplementary agreement to lower the reserve price of their development to $828m. The tender exercise for Spanish Village will close on 11 March 2019 at 3:00 pm.
Mr Paul Ho, chief mortgage consultant of iCompareLoan said owners of the collective sale relaunch site have to act quickly and decisively.
Whatever decision owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners. One way he said was to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
As collective sale process takes 20 to 30 months to complete, during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
Mr Ho pointed out that the rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
He said that many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
In order to understand how and whether to go into an En Bloc sales and sign on the Collective Sales Agreement (CSA), the owners will need to know how long it will take you to complete the En Bloc sales in case it is successful.The maximum and minimum duration of the en bloc sales process as indicated in the cumulative timeline in the table is roughly between 18.5 months to 38.5 months. The earliest any home owners can receive any en bloc sales proceeds could be around 13.5 months and the latest will be 32.5 months.
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