Standoff in Florence Regency en bloc sale amid risk of oversupply in area
6 October 2017
The 3 bidders in the Florence Regency tender have declined to raise their bids or reconsider their terms and conditions. So now the CSC are skipping to scenario 3: look for any buyer willing to sign within the 10 week private treaty window. Good luck there - the bid has to be at least $629m to match the LTSA mandated valuation.Failing that they will go for Scenario 4; a new tender in Jan 2018 and a new LTSA mandated Valuation at close of tender.
They have 1 year to make an application for sale to the STB from date of 80% - so enough time for at least one more roll of the dice.
Either way, I think they are toast.
29 SEPTEMBER 2017
No witnesses were allowed at the opening of the tender box
So, this is a case of the Valuation being higher than the RP & all the Bids. This is a good thing for FR. The Valuation protected them from selling below value and the bidders will have to increase their bids or some other shenanigans will come into play. They have 10 weeks to play around with this
And before the comments come in about the 'market setting the value'. that is patently not true. There are High Court decisions which say that the market does not set the value. The Gov does not sell it's GLS sites if the bids are too low and below their valuation.
Hang in there, FR.
There are a few possible scenarios open to FR, in my humble opinion:
First Scenario
The SC go back to the bidders and ask them to top up their bid to the Valuation. If the difference is not too great then perhaps one will oblige. The sale can be proceed as it does not run counter to the CSA and would be above the RP.
Second Scenario
None of the bidders agree to top up their bids and the SC then take the Supplemental Agreement route. Since the CSA states that there can be no sale below the official valuation they will have to come out with a new CSA and find a fresh 80% who agree to sell below the valuation.
This would be an improvident decision; the route of death. The 80% majority can sign for any RP they like but they cannot contract out their obligation to the minority not to undersell the property. The valuation at point of tender is there to prevent such an outcome.
If. say, the new 80% majority agree to undersell the property then the minority will make an objection to the STB. I believe the buyer can, with SC permission, agree to top up the difference in exchange for the withdrawal of their objections. This will probably be cheaper than topping up the difference for the full 100% of owners.
Alternatively, the 80% can agree to compensate the objecting minority from their own pockets.
Alternatively, the 80% can agree to compensate the objecting minority from their own pockets.
If the buyer or majority do not wish to top up and proceed with the sale regardless, then the minority will go to High Court. In my opinion, they have a rock solid case for the sale to be thrown out at that juncture. The sale would not be done in good faith with regard to sale price.
The LTSA valuation was set at close of tender as a safety net primarily for the minority. It is bad enough that one's home is appropriated by one's neighbours, but thankfully, the Law does protect against an undersell.
Third Scenario
A sale with any interested party through a private treaty as long as the Valuation price is met to avoid minority issues. The have 10 weeks to enter into a private treaty from close of this Tender 1 (LTSA Second Schedule 11.-(3))
Fouth Scenario
Hold another tender and/or get another independent valuation?
The LTSA valuation was set at close of tender as a safety net primarily for the minority. It is bad enough that one's home is appropriated by one's neighbours, but thankfully, the Law does protect against an undersell.
Third Scenario
A sale with any interested party through a private treaty as long as the Valuation price is met to avoid minority issues. The have 10 weeks to enter into a private treaty from close of this Tender 1 (LTSA Second Schedule 11.-(3))Fouth Scenario
Hold another tender and/or get another independent valuation?
Fifth Scenario
One should never underestimate the ingenuity of lawyers and marketing agents to circumvent or twist rules to their advantage. We shall see if any new permutation is born.
It's not the market who set the value but they do decide how much they are willing to pay as you have said " the bidders will have to increase their bids...". In other words they (the market) finally are the one who calls the shot nothing to do with high court.
ReplyDeleteOn the contrary, in this case it's the valuation which is calling the shots. The RP and bids were all off the mark, so it seems.
DeleteIf the bidders don't increase their bid, there is no deal. Can valuer insist there they do ? So how can valuation call the shots ?
DeleteThey have set the bar and now everyone must jump or die.
DeleteSo you want TC enbloc to die ? Won't be so easy for you in this round though unless you have lots of money to throw to bring yr objections to high court. I doubt many minority will join you because they know 1.7m is good enough to let this golden opportunity go. You are on your own. Good luck to your endeavor whatever your reason may be !
Delete1.4
DeleteWhere did I say I wanted to see this TC enbloc die? We are talking about FR here.
Indeed I share the dissapointment of FR SPs. I thought they woud have a smoother journey than us. Even if the bidder is willing to match the valuation price, they still have to worry about abt LUP. Would the bidder match it a second time ? Then they have to worry about objections and escalating replacement unit prices down the road. Let's just hope they can pull through this difficult period.
Deletei think you are mistaken. the LUP pertaining to TC is a condition specified explicitly by the developer. if the number is crossed, the sale is aborted. for FR, i dont think its a condition in the S&P...the norm is whatever the LUP and DC, the buyer will just pay,..seller deal with the offer price only they dont need to worry about the LUP...but for TC case, its a condition of sale that the estimated LUP does not cross a certain level...so its a different ball game altogether....otherwise its a done deal already.
DeleteMay I present to minority FR SPs your new supporter from the East - the blogger!
ReplyDeleteBlogger, please focus your energy on FR minority SPs, they need your help.
How to help unless she is one of the FR SPs. Are you going to pay for blogger's legal fee if she brings the case to high court. It's not cheap you know ? If not please help yourself. We have enough of our own problems. Good luck !
DeleteThis comment makes no sense. I am not a FR resident and have no influence or say in this estate. I am just an observer.
DeleteYou said "The Gov does not sell it's GLS sites if the bids are too low and BELOW their valuation." TC was sold ABOVE valuation, so what's really the issue ? Why are you still so unhappy about it ? What do you really want.
ReplyDeleteAll I have ever wanted from the vary beginning is just one thing. One thing only.
DeleteTo see the RLV on which the RP was based.
That's all.
A simple request sent by email, posted on their FB page, asked for at every turn.
A request denied or ignored by our representatives and paid experts.
The valuation was supposedly based on a RLV yet it is still hidden.
I cannot accept this valuation, it is pure garbage.
Then why don't you sit on the SC and if possible be the chairman. Then you can have more say. What's the point of making so much noise when you are not willing to volunteer your service ? If there's going to be round 4, I hope you can sit in the SC and get higher price for us.
Deletegood u cannot accept it..neither can i. I seriously hope you can bring this issue to the STB and all the way to the high court..hopefully it will take a long long time to settle this and the deal will be off as it will be over the specified time limit...that is provided the LUP condition doesn't kill the deal first. Then we will kick start enbloc 4 immediately...in that way i don't need to pay so much SSD!..but do not expect me to join you in the fight financially...cos i know the case will eventually be dismissed and it will be like throwing good money down the rubbish chute. It will just be you vs 400+ majority owners..good luck!
DeleteFrom our friendly ex-TC ex-SC member, her website says there is only 1 (ONE!) bid above RP.
ReplyDeletehttps://www.tracygoh.sg/news/florence-regency-en-bloc/
The Hougang market is saturated with enblocs for now. Valuation is one thing, but it is totally meaningless because there is zero volume. Any GLS or enbloc at Hougang will also not be able to transact even if below valuation.
ReplyDeleteBlogger needs to know what is reality and what is theory. If you are sick, you don't go to a librarian with a medical encyclopedia.
I don't understand your analogy. I agree the Hougang market is saturated. The FR owners should wait to fight another day and not settle for less than the valuation.
DeleteThat's exactly what you really want in the end isn't it - for the FR enbloc to be delayed indefinitely until someone pays "valuation", and when the time comes, you will move the goal posts.
Deletethat day will not come..just take it and move on..if you want something forever, go and get freehold..but then again nothing in this world is forever..
DeleteWhy blogger said its a good thing for FR when it was not sold? Many of the SPs must be very dissapointed and I feel sorry for them. If none of the bidders are willing to increase their bids all their efforts are wasted and their dreams shatteted as they have to start all over again and by then enbloc fever may have cooled down as so many developments are competing in enbloc. The fact is it's a good thing TC was sold above RP and valuation and we are getting 800k above market price if we sell on our own. Count your blessing instead of curse please.
ReplyDeleteFor FR Enbloc affected by new DC rate Sep-2017 (increase about near 30%)
ReplyDeleteDirectly affected developer's re-development cost and the bid price
Finally, deal or no deal is developer call
Not really is the independent valuation safeguard to the FR
Valuer may not know all the related cost involved for re-development
But developers do, they are business people, they offer the land price, they deal with their offer price, that's call "Market Price"
what happen if independent valuation did overlook of September DC (DP) interest & risk for redevelopment needed from developers?
DeleteCan it have;
Sixth Scenario: Independent valuer re-look and revise of their valuation?
So JLL is going back to the 1 bidder who submitted a bid for FR above the RP, and the valuation says that FR is worth $630m.
ReplyDeleteIf the bidder does NOT increase the price to $630 (which is a small amount to the developer <$30m), then I will be interested to see whether the SPs will vote to agree to sell BELOW valuation.
To me, it is no brainer. The majority FR SPs will cave in and sell at whatever is above RP. The RP to the SPs who have signed up, is THEIR VALUATION, which is the most important.
The blogger is just praying to stir up animosity amongst the majority in FR. If she fails to stop TC from enbloc, I recommend she moves over the stay in FR (if it hasn't enbloc). She will be a great asset to the minority FR SPs.
There is only 2 valuations worthy of discussion in any transaction - The BIDDERS valuation, and the SELLERS valuation. All the independent valuations are hogwash, including blogger's RLV discussion.
Everybody is protected from underseal, even the majority. They can't just compensate the minority alone if the price is found to be below valuation.
Delete8:
DeleteYes, I agree. the only valuations that are important are :
1) the sellers valuation on which the RP is based . Repeated requests by me have been ignored.
2) the bidders valuation which is never seen
3) the official valuation done at close of tender because that is the only mandatory one and the one which carries the most weight. We have not seen it. Just empty words over a few pages with double spacing between the lines. I would have thrown it back in their faces and demanded value for the thousands of dollars that it cost.
What if the developers does not want to go higher on their price, will FR be able to accept the bid at a lower price than valuation? But this would mean having to get another 80%?
ReplyDeleteOnly 3 bids for Florence Regency....the 1 bid for TC is certainly not a blip and this sets the stage for a plateauing and breather in residential enblocs.
ReplyDeleteNormanton and Amber next.
The CSC invite you to do Collective sales you decline, if not you be able to know everything and with your knowledge things could be better.
ReplyDeleteWhy does one have to be a CSC member to know everything? Everybody has the right to know the basis on which their properties are being sold. CSC members are simple SP's too. They don't have special rights.
DeleteLady please let the enbloc pass, eveytime I see your blog my heart race don't know will the enbloc go through. 1) bid with conditions 2) the LUP 3) biddig result 4)valuation report & I don't what coming up, I am about to retire from my work so need this enbloc for my retirement, THANK YOU for the ENBLOC 1 which was not in good faith but I guess this round with 1.7 millons is a good monies even to buy other property or downgrade with monies for retirement. Do good for people thing will come back good to you, why let people curse at you other estate enbloc have no such issue I know your frustration and concerns but don't put your self in so more misery. I appreciate you could let this enbloc pass.
ReplyDeleteWhy must you beg her ? She is not in the position to decide on STB outcome. Don't flatter her too much. If she has the money to waste let it me. In asking for more she will get lesser instead. It's her choice & her misery anyway when her case get thrown out of court. I am already starting to look see look see for my replacement house. It's quite an interesting journey for my house hunting, trust me. Even if we can't get through this round, at least I know the replacement market better which helps in round 4. Stay positive bro or sis. Don't her her spoilt yr day. It's not worth it !
DeleteI do not wish to give you a heart attack. Please differentiate between the many hysterical comments and what i have actually said.
Delete1) the conditions have turned out to be a damp squib. There were none of import or out of the norm
2) The LUP is, in my view, not a worry and I have never said it was!.Someone keeps bringing it up in the comments, but I believe TC is safe. Anyway, this LUP is beyond anyone's control as it is up to the Chief Valuer (not our rubbish independent valuer) to set. It will be fine.
3) bidding result is what it is. I blame the MA for the poor showing.
4) Valuation report is done and is below the RP
I have never once said I was making an objection to the sale - yet everyone assumes that I will. Even if I did make an objection, it would not stop this sale.
So, old man, relax, your retirement is secure unless something unforeseen happens - and that something I guarantee will have nothing whatsoever to do with me!
while i agree with most of your observations, i dont think we can just dismiss the LUP altogether...it is still a condition and in my opinion the final hurdle to the sale...nothing else comes close. the reason why i am still optimistic is that eventhough there is a chance we may cross the 115 mark,..the developer would be smart enough to top up any difference for reasons i will not elaborate here...so on that note, i am still hopeful for a nice chili crab makan come sales order day.
DeleteThank you for not giving me a heart attack too.
Deleteu sure your heart can take it after seeing so many zeros behind the number 17...??
DeleteThts the point blogger, the Chief Valuer will tell whats the actual value of this land. So whats there to fuss over this RLV calculation?
DeleteAgree with blogger - there is one or two people who keep talking about the LUP without end. Everyone already knows about the LUP condition, can they stop babbling non-stop about it.
DeleteCurious why blame the MA? Developers wont go for a tender bid just based on Newspaper adverts or a video presentation. They have professionals sourcing for land for them and make decisions based on max profits to shareholders
DeleteHi blogger. U remind me of the proverbial guy who is always miserable and complains about practically everything and anything. When it rains, he will curse the heavens for spoiling his plans to go out of the house or making his laundry wet. When it shines, he will complain its too hot…One day the heavens walked the middle path with a nice weather…neither rain nor sun in sight and everyone thought surely nothing for that guy to complain anymore…and as sure as the sun rises in the east, guess what, the guy still complained…he lament the fact now he has to carry the umbrella as he is not sure whether it will rain soon or the sun may come out again. The man always thought everyone else must be fools to accept whatever that comes along and not make noise about it. While the rest looked at him and wondered why he fails to realise happiness is a state of mind..…if it rains, we are happy, if it shines, we are happy too…in that way, we are always happy…as opposed to the guy who is always thinking “I will be happy IF AND ONLY IF…...” and end up being miserable all his life…
ReplyDeleteAppreciate and thank you (old man)
ReplyDeleteThe 3rd scenario is that the marketing agent goes back to negotiate with all the interested parties that did not submit their tender documents. There were more than 30 of them anyway that had shown interest in FR. And because quite a lot of them were bidding for other land sites located in beach road, meyer road, etc. So that sort of prevented them from bidding at FR and they were unsuccessful in other sites too.
ReplyDeleteIn short, it need not have to be the ones that had submitted their bids. But it would seemed that this scenario looks like a private tender. After all, the CSC would want to get the highest selling price offer. But thats what it was implied in the newspaper article, isn't it?
Why no witness when opening the tender box?
ReplyDeleteIf there is a private treaty for FR, will the developer likely impose any conditions? Private treaty could be better than tender bid as the developer wont know the number of potential buyers the SC/MA is negotiating with
ReplyDeleteI think its pretty obvious that if the developer in negotiation somehow has to impose conditions, the SC/MA will simply continue to meet with the next developer in the queue and discuss their interest, until they get a good price without any imposing conditions. That way, they can cover all the bases appropriately compared to depending on the luck of submitted bids in a public tender.
DeleteBesides, I had already listed the problems with the dangerously low RP before in the FR blog (which is now removed by the way). So all the people with severely inflated expectations got smacked in their face with the independent valuation. The fact is that the RP increase to 600M did not factor in the hidden increase in the valuation of the land after the new DC charges were revealed.
Now FR gets to rely on a new hidden RP above the new 629M minimum price instead. But it could be a blessing in disguise actually.
That makes sense actually. So the fact is dont undercut your RP, just to try to trigger bidding war. Yes blessing in disguise but in the end they might go the Shunfu way and get a private treaty done, although it might take some time
DeleteAs to when the process might actually start effectively, I would say it will be after Amber Park announced their results. Well, thats because most of the bids are likely to be at Amber Park!
DeleteIt is now clear to me what matters in this period of collective sales.
1) DP (new DC + LUP)
2) Land size and 5 year ABSD remission
And what is not as important as thought to be: Location of the site
It was quite a surprise with the lower bid value, in this case the RP was prized lower as a bidding war was expected and hoped it would drive up the value. How come the developers bid such low amount, surely they must have factored the dc rates which was announced not too long ago?
DeleteEven if you take our RP of 600M and add it with the DP of 288.5M, you will arrive at 917.5M. And this is already higher than what Amber Park could already promise at their RP of 768M. Granted that the developers would have to bid higher than 768M, they would generally try to limit the upper bound to 800M (as an example).
DeleteSo there is no way they would bother with FR until Amber Park is sold. Hence, it is predicated that would be few or no bids for FR, and developers could treat it as a throw of the dice to see if they can snatch it at a reduced price.
Luckily, there are no other sites comparable to Amber Park on the market right now. Tomorrow is the tender close for it as well. Thus, only after tomorrow, FR can start to have proper private negotiations.
Sorry, typo corrections. It is valuation of 629M + DP of 288.5M to get minimum requirement of 917.5M.
DeletePrivate treaty may be good if it was planned right from the start.
ReplyDeleteBut now, the equation works out badly for FR. There are 2 bidders below RP, and those 2 bidders knew when they submitted that they would clearly not pay above RP, and any success for them would be via private treaty. Now that they know someone is paying above RP, they will rule themselves out. This means there is only 1 realistic bidder. If I am that bidder, I won't increase and indeed i will want to decrease my price to RP level.
However, if FR had received 2 or more bids above RP but below valuation, then there could be a better outcome.
I doubt there is any blessing in disguise, sorry. And that is because it was revealed that only 1 bid was above RP - which there was no need to reveal in the first place.
But you have made an assumption that private treaty negotiations are to be done with only the 3 bidders. In fact, it will be done with all the 30 or more interested parties on an individual basis. This is what the MA actually wants to do.
DeleteIn short, the previous 3 bids are now considered useless and irrelevant in a private treaty.
Not sure I agree with you, if that is the case all private treaty is better than tender. Then isnt it better for all enblocs to aim for private treaty and use the tender as formality, since they can aim for a larger number of potential buyers?
DeleteWell those rules are set in stone by our government, and also because of the existence of the GLS programme. It is not fair for our government doing GLS on public tenders while the collective sales are only private. It is only fair if both processes undergo public tenders, while collective sales have the secondary advantage of doing it in private if the public sale failed to materialise.
DeleteAs to whether this could be exploited by existing collective sales, especially the ones with unrealistically high RP. I would say this is already happening, since quite a number of these larger residential sites have already announced their ridiculous asking prices. (e.g. Pine Grove, Spring Grove, etc)
DeleteThey may also have past experiences in their previous attempts in doing collective sales, so they know the private treaty is a better route to go for.
Although I dont think the premium for a private treaty is necessarily higher. Case in point being Shunfu example, they had done a private treaty but look at the value they got.
DeleteThis comment has been removed by the author.
DeleteYou are right. But it is still better for the SC/MA to attempt to negotiate for a much better deal. The difference as compared to Shunfu Ville, is that while they were in negotiation with only one buyer. So that raises the question on whether did they actually attempted to talk to multiple potential buyers at that time last year. Perhaps most developers were not so interested in acquiring land due to the lag time towards the property epicycle.
DeleteWe at FR, on the other hand, had to go back to the original state where more than 30 developers had shown interest and start negotiations after Amber Park concludes tomorrow. So as long as there are multiple developers willing to negotiate to buy FR, then it will be better off for FR.
But if the sole bidder decrease to bare RP, wont there be more minority objections? The developer could be shooting themselves in the foot if they want a quick sale before next round of development charges increase
ReplyDeleteFourth scenario is also a suicide i guess. If the valuation is lower (whether or not from Colliers), minority will cry foul. If valuation is still higher, then hole is even deeper.
ReplyDeleteThink this blog is giving heart attack also to FR old folks.
ReplyDeleteWhy did the valuation of FR come out so late and not before the tender? So Colliers was hired to do the valuation, did they know the RP and if they did, they actually put in a higher valuation than the RP, which was really opening the door for this current situation to happen? Was Colliers too bullish and anticipating the upward trend in a quickly moving market? Because if the valuation was done prior to all the Hougang excitement, the valuation may be lower? Anyway, good luck to FR SPs....
ReplyDeleteAccording to the law, the independent valuation can only be submitted on the last day of the tender, and only to be opened after the tender closes. So any earlier revelation of the perceived valuation of FR would be a violation.
Deletejust opened a can of worms of questions, then walked away and said good luck...
DeleteAre all the developers herding their bids at Amber Park just because it is freehold? The thing is FR is in quite a reasonably good location in OCR, dont think it loses out to AP in terms of location/amenities?
ReplyDeleteI can understand your point on location and amenities. Amber Park also has its own advantages in terms of location, e.g. it has a sea view. It commands a much higher price per unit and the land size is half that of FR. So the prospective developer would build a luxury condo there as opposed to a middle tier condo in FR.
DeleteAnyway, I suppose we will know tomorrow.
From the conversation. Valuation supercede RP. Vice Versa, can I ask, if the Valuation is below RP, the RP remains?
ReplyDeletethis blog is going to explode this week when the results of normanton and amber are out. blogger pls post a survey here... there are readers from outside TC also reading this.
ReplyDeleteGod I hope not. What kind of survey are you talking about?
DeleteActually this can be avoided if valuation is done before the RP is set. It should be quite affordable to pay for the valuation since shared with all SPs
ReplyDeleteAt the very least, all sale committees should apply to the URA for the correct development baseline. It costs a few thousand, but worth it in the long run. They never do, of course. Standing up at EOGMs and trying to get the majority to do the right thing is a lost cause. They just never listen.
DeletePerhaps it is a marketing strategy by MA, so that the valuation/RP wont be too high to deter bidders. If there are more bidders then the likelihood of bidding war will occur, dont you agree?
DeleteI agree it is a marketing strategy - but not to the owner's advantage.
DeleteImaging 560 owners in a pitch dark room, groping around for the RP with the MA/CSC in the corner with a bull horn shouting 'it's 2 feet to the left, no 3 feet to the right, go down a bit, there, now you have it'. When all he has to do is switch on the bloody light and the RP is right there in the centre for everyone to see - with 560 owners clutching at air off to the side. Transparency. Honesty. Just doing the right thing by the owners - how hard can it be? Too hard, apparently.
With the correct development baseline, owners can do an accurate DP and a valuation as accurate as anything an official valuer can do. Only the LUP is the wild card. The stakes are too large to leave to estimations and chance ... and chancers.
That is the issue, it is not stipulated in law to do a valuation/baseline before setting RP and in alot of cases, do not have the benefit of having the experience in enbloc like FR, SV. People tend to trust the professionals to get the best value for them
DeleteSince tender cannot be offered, if I am the developer, the ball is back with me, I can just offer at 600mm or below. Y bother to match? Since the other 2 bids are below RP too.
ReplyDeletehttp://www.businesstimes.com.sg/real-estate/bidders-wont-raise-price-for-florence-regency-en-bloc-tender
ReplyDeleteTo all the expert here: private treaty cannot be concluded below valuation?
As a NON-EXPERT, I say No. The LTSA mandated valuation at close of tender is the benchmark at which the majority cannot sell the estate. It is to safeguard the minority owners from the majority underselling the estate. This rule came into force in 2010 (LTSA amendments).
DeleteThe LTSA valuation applies to that tender exercise and that 10 week private treaty window only.
Another tender + 10wks would require another LTSA valuation at it's close.
.... In my humble opinion
Wow, Florence got slap in the face by collier for 29 million more. That is probably 50k a unit and now they cannot sell because no one want to match the Valuation. I don't know if for that 50k is a smart move or not since so much money has been paid for so many other en bloc. Miss the boat for 50k, I rather take less and run.
DeleteThe tail has wagged the dog. Thanks to Colliers valuation which is higher than the market valuation, FR SPs are basically royally scrxwed. Now that 3 bidders have declined to increase the bid, what is the possibility that anyone would step up? Virtually Zero. And if no one is stepping up now, what makes it likely that anyone will step up in January 2018, unless the market suddenly rocketed up?
ReplyDeleteTC may also end up in the headlines if the LUP condition is busted. Nothing is cast in stone until the day you rec the check. So while everyone is happy looking around for a replacement prop, just be mindful there is a slim chance the deal may be aborted. No look see for me until the route ahead is clear..in the meantime, glad to have a front row seat to see the fortunes of the various estates unfolding. 7000 units for bradell heights!..wow!..For FR case, it could be the profit margins are too thin for any meaningful increase in the bid price. no offence to FR folks and admittedly i am no expert in the kovan hougang area...but it seems there a bit not so 'happening',...more landed and lower density of HDB flats compared to tampines side..recent retail FH developments like promenade at pelikat etc..still got many vacant shops,..while it could be due to the onslaught of e-commerce and the 'interesting' design,..i feel it also speaks volume on the 'happening' level of a location...notwithstanding, best of luck to our bros and sis at FR..i am quite confident a white knight will come forth...
ReplyDeleteVery nice comment. I don't know about the white knight, though. With all the other ducklings (HUDCs) ready to hatch, it seems buyers have a smorgasbord to choose from, why would they choose FR at this time? Braddel View will be a favourite if they can hammer out another exit road with SLA/URA (not sure which).
DeleteI'd love to live that near to McRitchie Reservoir :)
That 7000 units must be wrong, I thought... and yes, I read the ST article wrongly. A TOTAL of over 7300 HUDC units have been privatised. Silly me, sorry :)
I can understand that not everyone is familiar to the Kovan area. The so-called happening condo, in my opinion, is Stars of Kovan, because it is a mixed development by Asset Legend. The unit prices are quite expensive for a leasehold project, although they do offer functional layouts and quality fittings, but they are slightly smaller too.
DeleteThe rest is a mixture of other expensive freehold condos (e.g. The Tembusu, TriLive) and freehold landed estates, mostly very expensive cluster houses (e.g. Charlton 18 & 27). A lot of people like the landed estate, if they can afford that is.
The Promenade @Jalan Pelikat is by Oxley as I recalled. As you know, Oxley is famous for its shoebox apartments and mall shops. Honestly, you would be better off with a unit in Stars of Kovan than one in the Promenade.
Thats why some of us want a developer better than Oxley to buy FR.
Blogger why do you think FR is toast? There is still 1 more chance for tender or they can another valuer to do another valuation?
ReplyDeleteThis outcome is what I anticipated in Post 19. The 2 who bidded below RP were never going to bid above RP anyway and have thought long and hard about it. The 1 who bidded above RP now realises that he is the only one above RP and wondering what is going on - did he bid too high? Why is there only 1 bid above RP? am I the only sucker?
ReplyDeleteBut if JLL had just kept quiet or just said 3 bidders without saying whether above or below RP, maybe the highest bidder would have matched.
Although it is not over, I think it just boils down to real bad luck for RP majority SPs - first just a bit late in enbloc at hougang area (giving RP SPs impression that the market is very good); second Colliers valuation; third JLL talking to the press when they didn't need to.
The developer more or less know already once the valuation come out. Even if dont announce to press, they had known already
ReplyDeleteare you implying MA can be bribed? or that confidentiality agreements are worthless?
DeleteYou must be living under a rock to believe the RP can be kept a secret with so many people in the know. Its wishful thinking with hundreds of SPs and all the other external staff involved.
DeleteDetailed update on FR again by BT:
ReplyDeleteBT revealed that one of the bidders was Kingsford, who could afford Normanton Park as opposed to a slight increase in the sale price of FR. Now you have to bear in mind, that the tender close date for FR was one day before the Beach Road commercial site, in which Kingsford also competed and lost. Anyway, I recalled that they still have unsold units in their condo near Sungei Serangoon.
http://www.businesstimes.com.sg/real-estate/standoff-in-florence-regency-en-bloc-sale-amid-risk-of-oversupply-in-area
Side note: BT people might be reading this blog actually.
Yes, I knew Kingsford was a bidder 2 days ago -but thought it sensitive information. Even if they were the top bidder and bid above the RP they can (perhaps) now walk away seeing as the RP has moved upwards. The window period in which the bidder cannot retract his bid might not apply in this case. The $1m deposit will have to be returned in that case. All speculation, of course.
DeleteI believe Kingsford is more than happy with bagging Normanton and is probably quietly relieved to be rid of FR!
A couple of few refinements to my rationalisation:
Delete1) It was not about the DP being higher for our estate.
2) It was not about the profit margin of the future estate.
3) The land size and future units does factor into the oversupply situation.
4) The ABSD and inability to sell finish in 5+2 years still remains a concern.
5) The tender close date of 27th September is definitely a wrong choice, unless it is a so-called JLL strategy.
6) The RP was definitely too low to match valuation, unless it is part of the above strategy.
Now to defuse this part on location. Experts mentioned by BT claimed that the location is getting oversupplied. It is certainly true if you combine Serangoon and Hougang with Kovan area together. Now if you take a step back and think critically.
Do you really think people will walk from Rio Casa or Serangoon Ville to Kovan???
If the estate is not within walking distance to a central focal point, then the focal point is not an advantage at all to that particular estate. Having said this, the only competition for the prospective redevelopment of FR is none other than, Stars of Kovan, which obviously still has some unsold units left. That is the actual oversupply, in my opinion.
We are perfectly fine even with one heavy bidder out of consideration, as it helps to get existing competitors out of the current market. I can only hope that the several developers that JLL are having their negotiations with, are the ones whom did not have the opportunity before to compete in Kovan.
DeleteThe oversupply situation is probably overblown, as ST Business today reports that there is a going to be an undersupply if the developers are not replenishing fast enough. A nice contradiction to the so-called experts by BT.
FR would not have expected the LTSA valuation meant to protect them ended up became the deal breaker. They probably rather take a price slightly above their RP or even at RP level if it meant clinching the deal
DeleteNot sure if it is a good strategy whether intentional or not. Why couldnt the RP been picked right from the start with a safe margin of error, at least Kingsford might have bid above the valuation price since it seems they had really wanted FR
DeleteMy apologies, I forgot to link the ST article that I mentioned.
ReplyDeletehttp://www.straitstimes.com/business/property/property-stocks-soar-amid-rise-in-collective-sales
FR would not have expected the LTSA valuation meant to protect them ended up costing the deal with Kingsford, such is life. They probably would have rather accepted a price slightly lower than the valuation or even at the RP level
ReplyDeleteKingsford wanted either florence or Normanton. Since got play out by the Valuation and rewarded with Normanton 1 week later, they obviously will not commit to 2 buys. Tough luck florence, if kingsford didn't get Normanton, bump it up another 20 mil will not be an issue with them
ReplyDeletethis post has basically exploded, throwing up a mini industry of "experts and real estate professionals" demonstrating their full array of "why it went wrong" and speculating and giving free advice on "what FR SPs can do".
ReplyDeleteRe starting blog
ReplyDeletehttp://www.businesstimes.com.sg/real-estate/standoff-in-florence-regency-en-bloc-sale-amid-risk-of-oversupply-in-area
I dunt think so.hougang is in best of all world.
Why ? Catchment area of potential buyera come fr mature areas Hougang,serabgoon ,n not so mature pungool n sengkang。
Pungol n SK residents want to move closer to town or,parents,
Many upgraders fr nearby town,incl AMK.
LOCAtions wise,all three better than TAMPINES Rd new condo.,Trilive erc
FR jus few bus stops fr NEX is a plus.
FR
Saw that some transaction this year for FR only 900k plus in April/May. The seller could miss huge capital gains if this enbloc goes through successfully
ReplyDeleteSome owners have waited too long for enbloc to materialise, so they cash out when they can. Sign............ do we need to wait for another cycle??
ReplyDeleteTrue, but a difference of a few months could be a few hundred thousand difference. Best is to cash out now. Next cycle might be another decade
ReplyDeleteI agree. FR's fate now lies with MA & CSC. Hope we are able to seal the deal before 5th Dec. Failing that, honestly, I do not see the point of another public tender.
ReplyDeleteWill JLL be able to reach more developers like maybe the china ones as well? That might help to have more coverage
ReplyDeleteA lot of the Chinese developers have bought their land. There are still a few lurking around. For example, Logan and Verwood tried to bid together for the Woodleigh sites, but lost. They did not bid for the Beach road site, though they might have bidded for Amber Park.
DeleteWhat is the logic of JLL to suggest another public tender in Jan'18?
ReplyDeleteTo make sure they get the RP correct one last time. Just maximise the opportunities, even though it might be pointless to do it in Jan 2018. We never know, there might be a white knight lurking around.
DeleteYes, I fully agree. Can forget about the whole thing and enjoy my stay here in FR. Cheers!
ReplyDeleteIs there no other developer willing to just top up to the valuation? FR is located in quite a well established area and Kovan mrt is just 1 stop away from serangoon. Surely the location wise is better than Normanton unless u consider the future CBD area which wont be ready till years ahead.
ReplyDeleteNormanton has the nearby Kent Ridge Park to boost its valuation. The Jurong CBD will not be ready in time, so as the Greater Southern Waterfront region. So our only concern is all the small freehold sites that are undergoing their collective sales now. They basically took away attention from our site.
DeleteYes, you are right. I totally agree with you. FR is near, in fact, walking distance to Kovan MRT, situated in a matured estate and near amenities. Yet, we landed ourselves in a private treaty situation. We have about 8 weeks left to find a buyer.
ReplyDeleteThis is the first time I hear people complaining about their properties being valued to high. Poor valuers, whatever they do is wrong :). Anyway, valuations are not an exact science. Different valuers arrive at different values. +-5% is not uncommon.
ReplyDeleteDevelopers they know what to look for, it might be GEM to the residents might not what they want.
ReplyDeleteIt is our low reserved price that we are in caught in this situation. So far, none of the estates' RP were below valuation.
ReplyDeleteYou are right. Our low RP that failed to meet the minimum valuation speaks a lot on our lack of trustworthiness in valuing our own estate. We don't seem to trust ourselves that our estate is in a premium location, and our RP should have been higher, like 660M.
DeleteThe Chinese developers are not looking for a steal, instead they want to make sure that what they buy is of reasonable and trustworthy price.
One is always smarter in hindsight. Was there a bid for $660m? No, back to the drawing board again.
DeleteYes lessons learnt. Likely the MA and CSC are getting the heat of the valuation mess. Truth be told can blame how come we got it wrong the first time, how come the professionals did not see the valuation issue arising, but what is the point. We should focus there is hope a private treaty can at least still be hammered out
DeleteTotally agree with you. Looking forward for some good news before 5th Dec.
DeleteThere is still time. Have faith in JLL. They may come up with something. It aint over till it' s over.
DeleteEnjoy the stay in FR...
ReplyDeleteWhen someone bought FR for 1.2m from the proceeds of another enbloc, everyone talks about it. But now, quickly forget that they are carrying the baby.
ReplyDeleteCase of MIS-speculation. Investment goes wrong. Nothing in this world is guranteed.
ReplyDeleteimagine the double whammy if the other enbloc also didn't go thru cos of conditions, and they bought FR thinking of hitting 2 jackpots, and left with 2 babies for next 10 years.....yes, never speculate beyond means, never know you are the "lucky" one...
ReplyDeleteHi fellow residents of FR, altough we are not successful in our en-bloc exercise, we can take comfort that FR is a nice, peaceful and convenient place to stay in. I would like to thank the CSC committee for volunteering their time and effort to undertake this thankless tasks. You are a selfless bunch who stay late into the night to meet, prepare the tender documents and evaluate the bids with JLL. You have been very patience in answering our queries and keeping us updated. We are fortunate to have you all in FR and I deeply appreciate your contribution to FR. Thank you.
ReplyDeleteThanks for update. Wait there is still the private treaty deal right. Do you mean the private treaty search for FR is aborted because no developers want to match valuation?
DeleteBe it "yes" or "no", the last official word should come from JLL. Until then...the deal is still on for negotiation..till 5Dec..good luck FR...you need plenty of it.
DeleteEverywhere people are writing and talking about enbloc sales fever. But FR is still waiting.Jll is still working and the owners are anxiously hoping...
ReplyDeleteEnbloc and the world rejoices with you. Fail, and you cry alone.
DeleteJLL has done Normanton and are working on others. Brokers are never losers. Look at APAC can IPO even .
MA for Normanton Park is Edmund Tie and Co.
DeleteReally royally screwed by the valuer. All they needed to do is to value the price at slightly lower than RP or slightly higher than RP. Why in the world would a valuer value it at so much higher than RP that it can potentially screw the deal. Now 300 household dreams are dashed because of 1 smart aleck. Boycott Colliers or get them to get us a buyer.
ReplyDeleteRubbish. Colliers has been professional and has prevented the estate from being sold for a pittance.
Delete84.5% signed for the RP of 600m which is more than 95% of the valuation price of 629m set by Colliers. I do not agree that 600m is a pittance. If all fail, FR may have to wait for some time for another wave of enbloc fever.Why not take the money now instead of spending more to repair the units of more than 30Years old?
ReplyDeleteRubbish. You have severely inflated expectations, thinking that you have the right to undervalue the price of the land that our govt wants to sell. Luckily, our govt does not think it this way and will continue to intensify the valuation, because it wants to sell the plots that currently surrounds the SRJC.
DeleteThe fact that Kingsford did not buy FR and would spent a lot more on NP, shows that the RP of 600M is incorrect and not trustworthy. In fact, our govt is likely to intensify the actual land valuation of FR to beyond 700M in two years time.
So you have no means to do anything about it.
dream on
DeleteWhen the time comes..be it 700m as you casually said or even 1 billion if we think "BIG", the crucial and real question is...DO YOU HAVE A BUYER? Name any price for the estate but who wants to buy?? There must be a buyer...with each passing day..more and more units are sold elsewhere...does FR still has a chance...talking about oversupply.
DeleteOh we really do have a buyer. LOGAN PROPERTY! And Logan partnered with Nanshan to gave the first billion dollar GLS residential plot bid. Getting either Logan or Nanshan into the public tender was like a pipe dream. But we have SUCCEEDED using the private treaty instead! HAHAHA!
Deletevaluation is not an exact science.
ReplyDeletevaluation more than 95% of RP should not a mean to sink the deal.
if FR is really sold an is valued by IRAS for stamp duty purposes,i think IRAS would accept the declared pricr if it is more than 95% of IRAS vakuation.
Yup valuation is not an exact science. But there is the law to protect the estate from being undersold. Look at gilman, minton rise which did not have the benefit of a valuation at tender closing and was sold for peanuts. You would not want your estate to be undersold right?
ReplyDeleteI would say yes to 600m but no to peanuts ..600m is not peanuts.
DeleteSeemed like there are two developers who are interested in FR. Hope there will be some good news soon.
ReplyDeleteAs long as some developers are talking to Jll, there is still hope for FR. Yes, let 's wait for the good news.
ReplyDeleteLet's hope our MA can find a buyer soon. Just want to avoid being pushed to a corner that we have to accept the best price given, above or at the valuation nearer, as we move towards the deadline.
ReplyDeleteConfirmation received, FR sold for S$629m
ReplyDeleteYay................. CSC & MA found a buyer for FR. Thanks for the great work! Great news indeed!
DeleteConfirmation received, FR sold for S$629m
ReplyDeleteYes read Business Times breaking news.
ReplyDelete