KIM YAM MANSION

Hoi Hup bags Kim Yam Mansion in $63m collective sale

July 19, 2007 PROPERTY developer Hoi Hup, part of Straits Construction Group, is understood to have bagged the 877-year leasehold Kim Yam Mansion, off River Valley Road, for about $63 million through a collective sale.
The price works out to about $460 per square foot of potential floor area inclusive of a development charge of about $300,000.
Owners of Kim Yam Mansion’s 40 apartments will receive more than $1.5 million each, or up to three times the $500,000-$600,000 the units would have fetched if they were sold individually.
This premium is one of the highest since en bloc sales began in Singapore in 1994. Sellers in most deals these days see collective premiums of about 30-50 per cent.
Jones Lang LaSalle brokered Kim Yam Mansion’s sale.
The four-storey development is about 40 years old.
It has a land area of 49,080 square feet and the site is zoned for residential use with a 2.8 plot ratio (ratio of potential gross floor area to land area).
Based on its purchase price, Hoi Hup’s breakeven cost for a new condo on the site will be about $670-$700 psf, say analysts.
Kim Yam Mansion is the first collective sale to benefit from a new law that took effect last month, facilitating en bloc sales of estates where the original landowner/developer retains the freehold title despite giving flat owners leases ranging from 850 to just under 999 years.
In such estates, strata titles were not issued under an old law, so the developer issued long leases instead. In the past, some of these landowners demanded hefty payments – amounting to millions of dollars – before they would consent to an en bloc sale.
This ate into proceeds for the flat owners, sometimes effectively blocking an en bloc deal.
Jones Lang LaSalle, Kim Yam’s marketing agent, worked with real estate lawyer S K Phang to highlight the anomaly in the law to the authorities.
This was fixed through an amendment to the Land Titles (Strata) Act that took effect on Dec 1, under which such landowners lose all rights to the land upon an en bloc sale.
The Singapore Land Authority has said that in all, 24 sites will be affected by the rule change – but did not identify them to protect the privacy of the present unit owners.
Source : Business Times - 26Jan 2006