(D) News on En bloc Sale
The en bloc sale scene was a picture of gloom as more and more projects which were sold earlier started to fall through. Had it not for the High Court’s stringent view on contract obligations more en bloc deals would have been aborted.
- (D.1) More en bloc deals are abortive due to uncertainties ahead
The collective sale of Finland Gardens in Siglap has fallen through. The move comes amid a flat market for private homes, with both buyers and sellers being very cautious. In the Finland Gardens case, both the majority sellers and the buyer, Sing Holdings, mutually agreed to let the deal die off.
- (D.2) Regent Garden to go through after High Court’s ruling
The stop-start en bloc sale of Regent Garden, a 31-unit West Coast Road condominium, to Allgreen Properties looks set to finally go through after the High Court directed the majority owners to complete the agreement.
The agreement with Allgreen, originally signed in April last year, was first delayed when six owners out of the 31 held out.
- (D.3) Airview Towers to go through
The Court of Appeal has overturned the ruling by the High Court and Strata Titles Board (STB) on the collective sale of Airview Towers, paving the way for mainboard-listed Bukit Sembawang Estates to acquire the property for $202 million.
Located at St Thomas Walk, Airview Towers became the subject of a civil appeal after a resident objected to the collective sale, arguing that the minimum 80% majority consent needed was not met in time.
(E) Foreign interest in commercial buildings in Singapore
- (E.1) Foreign investors are getting smarter with prospect of better bargain on the horizon
Gulf Arab exporters awash with cash from record oil income have put the brakes on foreign asset buys as the global credit crisis promises more bargains later and the political spotlight falls on how they invest.
Fear of domestic inflation has caused gulf states to find other alternatives investments to park their money. After a two-year buying spree in Asia, it does not take a mathematician to figure out that the current credit squeeze will soon throw up some real bargains in the real estate arena.
There has been a widespread anticipation by sovereign wealth funds that financial assets will depreciate further as the credit turmoil deepens in the West.
Acquisitions outside of the region by Gulf Arab buyers are down by more than 30% from the fourth quarter of 2007 onwards. A year ago, the Gulf states spent around US$89.13 billion acquiring real estate everywhere in the globe.
- (E.2) Record $3,125 psf paid for office building in volatile market
Commerz Real, a fully-owned subsidiary of Germany's Commerzbank, has bought 71 Robinson Road, setting a record commercial transaction in Singapore.
Although the price was not disclosed, sources say it was $3,125 per sq ft of net lettable area (NLA), or $743.8 million. This is 7.7% higher than the $2,900 psf of NLA paid for Hitachi Tower in January 2008.
Commerz Real is the buyer who bought 78 Shenton Way in December 2007 for $650 million or $1,857 psf of NLA.
By some reckoning, 2007 saw core funds acquire at least 10 office assets held by opportunistic funds. Larger deals include that by CLSA, which sold the SIA Building to German pension fund SEB. At least another 13 office assets could be targets for core funds, including DBS Towers 1 and 2.
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