The full article can be found in Lianhe Zaobao, Finance Section, Page 24, 8 June 2018.
The freehold Faber Garden at Upper Thomson made the headlines as Singapore’s largest collective sale deal, if it succeeds, now faces with technical hitches.
The site area of 544,738 square feet has a plot ratio of 1.6 and a height control of 12 storeys. Initially planned to yield more than 1,150 units based on the 70 square metres guideline, will now be reduced to just 900 units in view of traffic conditions.
The Land Transport Authority (LTA) set a new rule in November last year for all potential buyers, developers and real estate agencies who are submitting outline or development applications for en bloc proposals to submit a Pre-Application Feasibility Study (PAFS), which ascertains the maximum number of dwelling units in its post-redevelopment, in order not to strain the existing road network and cause congestion and inconvenience for residents. With 1,150 units, there may be severe traffic congestion.
Faber Garden owners are worried that their collective sale will be mired as developers may retreat and give up the bid due to the decrease in construction units and profits.
ZACD Executive Director and Chief Investment Officer, Nicholas Mak said, “Faber Garden still cannot find buyers because of the high asking price and high cost involved in developing the project. There are also many private housing projects in the area. Developers must carefully measure the supply and demand of private houses in the area and the investment risks.”
He added, “Developers have become selective due to the boom in the collective sale market, and many developers are already holding a large residential land bank.”
He predicted that Singapore’s collective sale market will be more competitive in the following months. As such, the appeal of collective sale projects will only be based on price and location.
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