UOL and CapitaLand Submit Bid for Thomson View En Bloc Site
Thomson View En Bloc Sale Hinges on 80% Owners Consent. (It is Not Sold Yet)
UOL Group and CapitaLand Development (CLD) have entered into a put-and-call option agreement to acquire Thomson View condominium for $810 million.
This agreement, announced on October 26, marks a significant joint venture for both companies, involving UOL Group’s subsidiary, Singapore Land Group, and CLD’s indirect subsidiary, CL Onyx Pte Ltd.
The acquisition will be carried out on a 50:50 basis through United Venture Development, an 80:20 joint venture between UOL Group and Singapore Land Group, and CL Onyx.
Thomson View, a 255-unit private condominium located at Bright Hill Drive, was completed in 1987 and sits on a sprawling 504,314 square feet site with a 99-year lease dating back to April 1975.
The site, boasting a plot ratio of 2.1, offers a unique opportunity for redevelopment in a prime location.
The site is conveniently situated with Upper Thomson MRT Station nearby, within 1 kilometer of Ai Tong School, and close to amenities such as Thomson Plaza and multiple parks and nature reserves, making it a highly attractive property for residential development.
Thomson View Owners Lower Reserve Price by 12% in Pursuit of Successful En Bloc Sale
The condominium had undergone multiple attempts at a collective sale since earlier this year, with an initial reserve price of $918 million.
The tender, which relaunched in February and again in July, did not receive any bids.
Subsequently, a supplemental agreement was signed to lower the reserve price to $808 million, and roughly 65% of the owners agreed to the new reserve price.
The acquisition price of $810 million represents a decrease of 11.8% from the original reserve price, translating to approximately $1,178 per square foot per plot ratio (psf ppr), factoring in land betterment charges and a lease upgrading premium for a fresh 99-year lease.
Swee Shou Fern, head of investment advisory at Edmund Tie, highlighted that renewed interest from developers and recent site viewings have helped facilitate the sale. The deal still hinges on 80% of the strata-titled owners agreeing to the price.
UOL Group CEO Liam Wee Sin and CapitaLand Development CEO Tan Yew Chin emphasized the strategic advantages of the Thomson View site, including its elevated 5-hectare expanse with unblocked views, proximity to public transport, reputable schools, and surrounding amenities.
If the acquisition proceeds as planned, Thomson View will be the largest en bloc transaction of 2024, reflecting continued interest in the prime residential real estate market.
Recent Case of Far East Shopping Centre Collective Sale
Far East Shopping Centre En Bloc Sale Falls Through as Owners Reject Lower $850 Million Offer
Second Attempt at Sale Fails to Gain 80% Owner Consent
The en bloc sale attempt for Far East Shopping Centre on Orchard Road has failed for the second time after unit owners rejected a reduced offer of $850 million, falling short of the 80% approval required for the deal.
Only around 60% of owners consented to the sale, resulting in the collective sale committee being unable to proceed with the sale agreement. The bid of $850 million was approximately 8% lower than the previous guide price of $928 million.
The latest sale attempt followed a collapsed deal from September 2023, when Glory Property Developments, linked to Chinese businessman Du Shuanghua, withdrew after failing to secure Urban Redevelopment Authority (URA) approval for additional gross floor area under the Strategic Development Incentive (SDI) scheme.
This scheme is intended to encourage the renewal of older properties in key city areas. Despite the attempts to lower the price and facilitate the sale, the collective effort to sell Far East Shopping Centre continues to face obstacles due to insufficient owner consent.
The 999-year leasehold property, which consists of a five-storey retail podium, a 10-storey office block, and two-storey basement, remains one of Orchard Road’s notable developments.
With neighbors like Liat Towers and Wheelock Place, the property remains a prime real estate asset despite the recent failed attempts at a collective sale.
The rejection of the lower $850 million offer highlights the challenges faced by collective sales in Singapore’s current market.
While other nearby properties, such as Delfi Orchard, successfully secured buyers earlier this year, Far East Shopping Centre’s inability to reach the required consent showcases the complexities involved in bringing en bloc sales to fruition in a competitive real estate environment.