Kensington Park condo up for collective sale with $1.28 billion guide price

by Albert02

Kensington Park condo up for collective sale with $1.28 billion guide price

Kensington Park condo up for collective sale with $1.28 billion guide price. Kensington Park condominium in Serangoon Garden has been listed for collective sale by public tender with a guide price of $1.28 billion, four years after previous efforts.

According to CBRE, the guide price for the 999-year leasehold residential site with 316 units translates to a land rate of $1,371 per sq ft per plot ratio (psf ppr) (May 18).

The price includes a 7% bonus gross floor area for balconies and a $232.1 million development charge.

This is more than the $1.05 billion that owners had hoped for in 2018, before property cooling measures were put in place in July, slowing the collective sale momentum.

According to The Business Times, the collective sale agreement was signed by at least 80% of the owners last month.

Kensington Park has a plot ratio of 2.1 and is located on a 491,000-square-foot land plot zoned for residential use under the Urban Redevelopment Authority’s Master Plan 2019.

The property, which was built in 1990, is located on Kensington Park Drive and has unobstructed views of the Serangoon Garden landed estate.

According to Mr Michael Tay, head of Singapore capital markets at CBRE, the site could be redeveloped into more than 1,000 residential units.

“Given the site’s location, demand for strata-landed houses will also be high among home buyers, giving developers the option of including these in the unit mix of the new development,” he added.

Kensington Park’s tender will close on July 7 at 3 p.m.

Kensington Park’s opening follows a string of recent collective sale attempts. It comes despite property cooling measures implemented in December, which increased the additional buyer’s stamp duty (ABSD) for developers to 40% of the upfront land price, with the remaining 35% remittable if projects are completed on time.

Previously, the ABSD was paid in full up front, with the remaining 25% remittable if everything was completed and sold within five years.

According to property analysts, developers will continue to opt for collective sales, depending on the location and yield of the site.

“The successful sale of Golden Mile Complex at $700 million gives the market confidence that developers remain keen to acquire attractive sites despite the high price tag,” said Lee Sze Teck, senior director of research at Huttons Asia.

He pointed out that Government Land Sales sites are overly concentrated in some areas, so developers turn to the collective sale market to acquire sites in areas with little to no new supply in order to capitalize on potential pent-up demand.

“However, developers are finicky. With the exception of Golden Mile Complex, the successful collective sale sites in 2022 are small and yield less than 100 units. “For larger sites, consortium bids are likely,” he added.

Developers will be wary of acquiring large sites like Kensington Park, according to Nicholas Mak, ERA Singapore’s head of research and consultancy.

“The sweet spot is when the land parcel yields between 200 and 500 units, or like the upcoming Lentor Modern with more than 600 units,” he explains, “because developers will be more confident in selling all units within five years to qualify for ABSD remission.”

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