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THEY'VE WON
HURRAY FOR
FINLAND GARDENS MINORITY
&
everyone is happy
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Today - 22 April 2008
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Buyers, sellers call off sale of Finland Gardens.
ANOTHER collective sale has fallen through. This time, however, there were smiles all around – a reflection of how sharply sentiment has changed in the property market.
Both the majority sellers at Finland Gardens in Siglap and the intended buyer, Sing Holdings, agreed yesterday it would be best to just let the deal die. And the minority sellers, who were against it from Day One, were thrilled.
The sellers rung the death knell when they halted a High Court appeal yesterday.
They went to court last year to overturn a Strata Titles Board (STB) decision made in November last year.
The STB had thrown out the $49.5 million sale, ruling the deal lacked 80 per cent approval and that the price had not been obtained in good faith.
Sing Holdings initially backed the court appeal but withdrew yesterday its application to intervene in the appeal.
Managing director Lee Sze Hao said Sing Holdings told the sellers late last week that Sing Holdings no longer wanted them to continue with the appeal.
‘The key determining reason for us is the uncertainty of the timing of the sale and market conditions,’ said Mr Lee.
He added that the sale had dragged on for a long time and, considering market uncertainties ahead, it did not make sense to continue waiting.
The Sing Holdings statement said it considered uncertainties over the time needed to procure the order for the sale and market conditions, coupled with the rising costs of construction.
The sellers from 40 units met on Saturday. ‘We agreed to the buyer’s request to call off the deal amicably,’ sales committee chairman Song Koon Poh told The Straits Times. ‘Current market prices for our estate are still favourable… and the long waiting time has worn everyone down.
‘We don’t know how long this will drag on. Assuming the appeal is successful, we will need three months for final completion and another six months to vacate.’
The developer is said to be bearing most of the legal costs.
The minority owners, who fought hard against the sale and won the STB decision last year, were happy that it was over.
The deal for the freehold estate, with 48 units of walk-up flats, is now off. The move comes amid a flat market for private homes, with both buyers and sellers now cautious.
Sing Holdings bought the 98,309 sq ft Finland Gardens for $504 per sq ft on the land area in November 2006, just before prices surged in the first half of last year.
When the estate was launched for sale in July 2006, the owners were hoping for between $50 million and $55 million.
Meanwhile, Sing Holdings has completed the purchase of two collective sale sites – Bellerive and Hillcourt Apartments. Both are at the demolition stage.
Source : Straits Times – 22 Apr 2008
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ANOTHER collective sale has fallen through. This time, however, there were smiles all around - a reflection of how sharply sentiment has changed in the property market.
Both the majority sellers at Finland Gardens in Siglap and the intended buyer, Sing Holdings, agreed yesterday it would be best to just let the deal die. And the minority sellers, who were against it from Day One, were thrilled.
The sellers rung the death knell when they halted a High Court appeal yesterday.
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He's glad the 2 yr saga is finally over
Mr Micky Sim was overseas when he first heard that his estate, Finland Gardens, was going to be sold en bloc two years ago.
The first thing he did was to call his contractor who was renovating the unit he had recently bought there.
‘I cut back by at least 30 per cent. Forget about partitions. And we made things movable, rather than fixed,’ said Mr Sim, 38.
He bought the apartment before the deal was announced.
Two years on, he can finally go ahead and finish the renovations.
As one of the minority owners who contested the sale of Finland Gardens, he is delighted that the estate will no longer be sold.
But he feels that most of the majority owners will not be unhappy either, as the deal was made before the upswing in the property market last year.
Mr Sim, who works as a director in a shipping company, thinks that even if the owners sell the apartments themselves, they can do better than the $504 per square foot price offered by the en bloc buyer – even though the market has since been cooling.
Still, he is happy to stay put at his home and will sell only if the price is right.
The two-year saga has hurt the spirit of the community somewhat, he conceded.
But he feels that most neighbours are still on good terms.
“It’s time for everyone to move on. Let bygones be bygones,” he added.
Source : Sunday Times – 27 Apr 2008
Couple's dream turns to nightmare
From en bloc dreams to endless nightmares – that was how Madam S.L. Chia and her husband described their experience these past two years.
It became a nightmare because the promised $1.1 million from the sale of the couple’s Finland Gardens flat never came, as the deal became snagged in a dispute.
They were still servicing the loan on their flat, in Siglap, when the couple went ahead and took a loan on a second property.
Thus, closure of sorts came for them when, last week, the collective sale was called off. It had been sold in November 2006.
Madam Chia, 47, her husband, 55, and their son, 15, will be staying put in Finland Gardens, which has been their home for the last 14 years.
She felt that the collective sale had rushed her into buying a second flat.
A friend had advised them to buy another place quickly because he expected that property prices would go up further.
‘He was right. Within six months of our new home purchase, prices went crazy,’ said Madam Chia, who works in the media industry.
The new flat, further away in Upper East Coast, cost $800,000. Madam Chia took a 10-year loan that resulted in her having to pay $4,000 – effectively, her monthly salary – every month.
What the couple did not expect was that minority owners would successfully object to the sale.
The couple had ended up so strapped they could not afford to renovate their new house – something they can finally do now.
“And enough of the term ‘en bloc’ please,” Madam Chia said.
Source : Sunday Times – 27 Apr 2008
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Out of hundreds of en blocs, the few lucky ones so far are:
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Tulip Garden -saved - developer (Bravo) pulled out
Tulip Garden en bloc may be called off
Buyer Bravo will ‘accept costly missed opportunity’ if it’s not granted payment extensions
The owners of Tulip Garden met over the weekend and BT understands that most of them have taken the view to rescind the $516 million collective sale to an associate company of Bravo Building Construction – if the second 5 per cent instalment due to them is not paid by the deadline of midnight yesterday.
BT understands the owners could not accede to the Bravo unit’s request for another extension to pay up the second 5 per cent instalment which was to have been paid yesterday, to June 7, as well as to extend the completion date of the transaction, which is when it would have to pay up the remaining 90 per cent of the purchase price, from May 28 to Aug 7.
However, Tulip Garden’s owners, through their lawyers, are understood to have informed Bravo yesterday that the payment deadline will not be extended and that they reserve their rights to rescind the sale.
A Bravo spokeswoman said yesterday the consortium buying Tulip Garden is seeking an ‘unconditional extension of time’ for making the two payments, that is, it is not prepared to make any further payment to the sellers in exchange for the extensions, until June 7.
If the sale is rescinded, Tulip Garden owners will keep the $25.8 million or 5 per cent of the purchase price they had been paid so far, BT understands.
‘If these extensions are not obtained, the consortium will accept this costly missed opportunity to develop a stunning 350-unit condo with unmatched features in a prominent Holland Road corner,’ Bravo said in a statement.
Bravo has a minority stake in the consortium buying Tulip Garden. The en bloc sale of Tulip Garden was approved by Strata Titles Board in February.
In its statement, Bravo said that it and its majority consortium partners for the purchase of Tulip Garden intend to complete the purchase. Bravo did not identify the consortium partners. ‘Since December 2007, major foreign institutional investors and a few local investors have expressed strong interest to form the consortium. The current turmoil in financial and stock markets matched with sporadic bad news have caused unforeseen delays in securing ultimate approvals to commit funds,’ Bravo said in its statement.
Bravo also indicated that approval for Tulip Garden’s sale from Strata Titles Board in February came earlier than anticipated. ‘Coupled with the consortium’s strategic decision to significantly increase equity to balance the current cautious lending by banks, the current deadlines for next payments have become too constricted and no longer practical,’ it added.
BT understands that Tulip Garden owners declined to further extend the completion date of the sale of Tulip Garden as the STB had already given its order for the sale, binding all owners to a sale, and the sales committee does not have the powers to vary the completion date of the sale beyond the originally agreed May 28. The date was based on three months from receiving the STB order for sale, as stipulated in the sale and purchase agreement for Tulip Garden inked last year.
Assuming Tulip Garden’s sale is rescinded, it may be a while before the prime District 10 site is back on the en bloc bandwagon. If owners wish to do a fresh en bloc sale, they would have to do it under revised collective sales rules that took effect in October last year and which are more stringent.
The $516 million deal for the property worked out to a unit land price of $1,018 psf per plot ratio. No development charge is payable.
Last month, the $162.8 million collective sale of Makeway View in the Newton area to another associate of Bravo was rescinded. BT reported that one per cent of purchase price paid by Bravo so far was forfeited.
Source : Business Times – 8 Apr 2008
Tulip Garden sale off? How the deal went
Condo owners likely to call off $516m en bloc deal after developer misses payment deadline
THE $516 million collective sale of Tulip Garden condominium near Holland Road seems to be dead in the water after the developer missed a payment deadline yesterday.
The condo owners appear poised to formally call off the deal and pocket a cool $25.8 million – the original 5 per cent deposit paid by developer Bravo Building Construction.
LOSS AND GAIN: Bravo will forfeit its $25.8 million deposit if the Tulip Garden sale is axed. Each owner could pocket over $100,000.
Bravo would forfeit the sum if the deal is scrapped. That would mean each of the 164 unit owners could pocket more than $100,000 on average.
The cancellation of a collective sale because of a cash crunch is a rare event. Bravo and its partners say they have had trouble raising the necessary funds.
Earlier this year, the $162.8 million collective sale of Makeway View in the Newton area was ditched by an associate of Bravo. The firm said a higher-than-expected development charge was the reason for backing out. A deposit of $1.63 million was reportedly forfeited.
Last Saturday, Tulip Garden owners held a meeting and indicated in an informal show of hands that they wanted to cancel the sale if Bravo missed the latest payment, also $25.8 million. This payment had already been delayed at Bravo’s request from the middle of March.
By late yesterday, no payment had been made. Bravo was putting on a brave face but it was, in effect, accepting that the deal appeared to have been lost.
The developer had asked for more payment extensions – to make the next 5 per cent payment by June 7 and then complete the deal by Aug 7.
But based on last Saturday’s meeting, the owners appear unlikely to agree.
Almost all the owners at the meeting indicated that they wished to call off the sale and keep the deposit if Bravo did not pay up by yesterday, according to the people present.
A Bravo spokesman said yesterday that the firm is now seeking an ‘unconditional’ extension of time.
‘If these extensions are not obtained, the consortium will accept this costly missed opportunity to develop a stunning 350-unit condo with unmatched features in a prominent Holland Road corner,’ she said. The condo is on the corner of Holland Road and Farrer Road.
Bravo inked a deal to buy the freehold site in July last year. It was due to have been completed late next month.
The Bravo spokesman said the firm has been seeking partners since November last year.
‘The current turmoil in the financial and stock markets matched with sporadic bad news have caused unforeseen delays in securing ultimate approvals to commit funds,’ said Bravo. It added that the Tulip Garden owners had consented to the sale earlier than anticipated.
‘Coupled with the consortium’s strategic decision to significantly increase equity to balance the current cautious lending by banks, the current deadlines for next payments have become too constricted and no longer practical,’ it said.
Bravo added that it has tied up with two local and two foreign parties to buy Tulip Garden. But unless an extension is given, they will not be offering more money, said the spokesman.
She said that if Tulip Garden owners still want to attempt to sell en bloc, they may face an ‘unwelcome lower bid price’ given weaker market conditions.
Tulip Garden sold for about $1,018 per sq ft (psf), more than its earlier guide price of $900 psf in January last year. The development has 164 units comprising 96 flats, 66 maisonettes and two shophouses.
If the sale works out, flat owners stand to reap $2.5 million to $4.2 million while maisonette owners would receive about $3.4 million each. The shop units would get about $1.1 million each.
Amid last year’s booming market, Bravo also made two other fairly large collective sale deals: Pender Court, off Telok Blangah Road, at $80 million in July last year, and Makeway View.
Bravo has postponed the completion of Pender Court’s sale until late this month.
Given the slower market, more sellers are now open to lower prices. Yesterday, Royalville, a freehold mixed development off Sixth Avenue, was relaunched for sale en bloc at a lower indicative price of around $305 million.
It was offered for sale in a Nov 9 tender, which failed to attract bidders at its earlier guide price of $330 million to $350 million.
How the deal went
July 2007: Bravo Building Construction decides to buy Tulip Garden en bloc for $516 million. It later pays a 5 per cent deposit of $25.8 million.
February 2008: The Strata Titles Board approves the sale. The sale completion date is set for May 28.
March 13: Bravo is due to pay another $25.8 million, but asks for – and is granted – an extension of time until yesterday.
March 18: Bravo asks to extend the payment deadline from yesterday until May 5. It also asks to set back the sale completion date from May 28 to July 23.
March 24: Before agreement for its earlier requests can be given, Bravo asks for further extensions of time to pay by June 7, instead of yesterday, and to complete the sale by Aug 7, instead of May 28.
April 5: Owners indicate in an informal show of hands to cancel the sale and take the $25.8 million deposit if Bravo misses the payment deadline yesterday.
Source : Straits Times – 8 Apr 2008
Confirmed: Tulip Garden’s en bloc sale to Bravo rescinded
T’S official. Tulip Garden’s owners have rescinded the $516 million en bloc sale of the estate to a unit of Bravo Building Construction.
Lee & Lee partner Ow Yong Thian Soo, representing ‘Tulip Garden’ owners, confirmed that the firm yesterday sent a notice of rescission of the sale- and-purchase agreement for Tulip Garden to Bravo’s lawyers. ‘We also informed them that the sellers will be forfeiting the 5 per cent of the transaction price paid to them so far. And our clients reserve all rights,’ he said.
The notice of rescission was sent to Bravo after it failed to pay the second 5 per cent instalment by the deadline on April 7. Bravo had requested another extension of this deadline to June 7, as well as to extend the completion date of the transaction (which is when it would have had to pay up the remaining 90 per cent of the purchase price) from May 28 to Aug 7. Tulip Garden owners met over the weekend and most indicated they wanted to cancel the sale if Bravo missed the payment deadline on April 7.
Source : Business Times – 9 Apr 2008
$516m deal: Tulip Garden owners call off collective sale
OWNERS at Tulip Garden have called off the $516 million collective sale of their 164-unit Holland Road condo, but they will keep the $25.8 million deposit.
Mr Ow Yong Thian Soo of Lee & Lee, who is representing the owners, told The Straits Times yesterday that a notice rescinding the sale was given to the intended buyer – a consortium led by Bravo Building Construction.
The owners also told Bravo that they would retain the 5 per cent deposit, a right allowed under the sale and purchase agreement.
They decided to cancel the sale after Bravo missed Monday’s deadline – which had already been extended from last month – to pay a further 5 per cent of the purchase price. The developer wanted even more time to pay and complete the sale.
The deposit will now be distributed proportionally. Owners who were due to receive $2.5 million to $4.2 million from the sale will now get 5 per cent of these sums once the estate pays expenses of possibly $1 million or more. These include half the conveyancing fees, half the fees of consultants Savills Singapore, plus litigation and administration costs.
Bravo bought Tulip Garden last July and was due to complete the sale late next month. It also has unfinished business at Pender Court, where it missed the $80 million collective sale completion date but has an extension until later this month.
Source : Straits Times – 9 Apr 2008
Was Bravo too ambitious?
Analysts point to bad timing for developer in 3 en bloc attempts
ONE construction and property development firm, troubled by the cooling property market and credit crisis, has left three en bloc sellers’ hopes of a cash windfall in shambles – and some analysts wondering if it is a victim of circumstances, or a player that bit off more than it could chew.
Since April 1, Bravo Building Construction has made the news for rescinding the sale of Makeway View, and for delaying payments for the purchase of Tulip Garden and Pender Court.
Pender Court’s 48-unit owners are now waiting until April 29 to see if payment is made. If they do not see their cheques of over $1 million each by then, most would “take it that the sale is off”, a resident told Today.
Tulip Garden’s 164 unit owners also look certain to call off the sale, as they voted in a show of hands over the weekend not to give Bravo a longer time to pay.
Bravo has problems raising funds and is seeking an unconditional extension of time.
The company is likely to forfeit its first payment of $25 million, and owners would receive their share of about $125,000 each by this month, a Tulip Garden resident said.
Some market-watchers are sympathetic of Bravo’s plight – going ahead with en bloc purchases last year, seeking partners to come on board since November, and now facing trouble raising funds to pay the sellers.
“It’s unfortunate things didn’t work out. It was because of the timing and all the bad news in the financial markets,” said Mr Eugene Lim, assistant vice-president of ERA Singapore.
Noting that the property market has been relatively quiet since September after the boom earlier, analysts said Bravo may have “just missed the cycle”.
They said the company’s woes showed that dabbling in en bloc was not for everyone – especially not smaller, less experienced players.
Bravo, whose office is in Geylang Lorong 23, was set up in 2002. It ranked fourth in collective sale purchases last year, outbuying City Developments and Hotel Properties.
A lawyer dealing in collective sales found Bravo’s performance “very strange”, because compared to the big players such as United Overseas Land, CapitaLand and Guocoland, it was “nobody at all”.
Smaller companies would have problems securing funds from banks in the current credit crisis, he said.
While it is common for developers to make purchases before roping partners into the project, small players should secure partners before buying sites, said Mr Colin Tan, head of consultancy and research at Chesterton International.
For example, CapitaLand bought Gillman Heights last February, but later sold half its stake to Hotel Properties (HPL) and two private funds.
“It is common for one party to go in first, but for less experienced parties, they might over-reach,” said Mr Tan.
Meanwhile, residents at the Makeway View, Tulip Garden and Pender Court seem quite happy to stay put.
One Tulip Garden owner said the money forfeited by Bravo was some consolation for the “hassle we had to go through”.
Another owner said she gave up her car after moving to Tulip Garden seven years ago, and found its location hard to beat.
A Pender Court resident said she was happy to remain in her home of 22 years “where my children grew up”.
Makeway View resident Mark Devilliers, 31, who has been living there for over a year, did not know that its en bloc had fallen through.
Rejoicing when told of it by Today, he said it would be “sad if a nice building such as Makeway View went en bloc”.
Source : Today – 9 Apr 2008
Tulip garden: Kim Eng's Ronald Ooi cuts losses on condo deal
He is said to have led group which backed the purchase of Tulip Garden
Kim Eng Holdings managing director Ronald Ooi, in his personal capacity, is believed to have led a group that backed Bravo Building Construction on its failed $516 million purchase of Tulip Garden.
Tulip Garden: The $516m deal failed as the buyer’s request to extend the payment deadline was rejected. The $25.8m deposit was forfeited
BT understands from market sources that Mr Ooi and the group were instrumental in raising the initial $25.8 million or 5 per cent deposit on the Tulip Garden sale which has since been forfeited.
Mr Ooi, who is said to be worth some $300 million, is said to have decided to cut losses on the acquisition in the face of weakening sentiment on the prime property front. ‘It had become more challenging to raise the necessary funds under current market conditions to complete the deal,’ a market watcher said.
Mr Ooi could not be contacted.
The deal, which worked out to $1,018 psf per plot ratio, was inked in July last year when the Singapore property market was enjoying one of its strongest bull runs in recent memory.
The collective sale was approved by Strata Titles Board in February this year.
But last week, lawyers representing Tulip Garden’s owners sent a notice of rescission of the sale and purchase agreement for Tulip Garden to Bravo’s lawyers and notified them that the owners would be forfeiting the 5 per cent of the transaction price paid to them so far as deposit.
This was after Bravo failed to pay the second 5 per cent instalment by the deadline on April 7.
Bravo had requested another extension of this deadline to June 7, as well as to extend the completion date of the transaction (which is when it would have had to pay up the remaining 90 per cent of the purchase price) from May 28 to Aug 7
Tulip Garden owners had a meeting and most decided they wanted to cancel the sale if Bravo missed the payment deadline on April 7.
Source : Business Times – 16 Apr 2008
Deal's off but she still lucked out
For housewife Jane (not her real name), the no-go on the en bloc deal at Tulip Garden, where she has a flat, proved a blessing.
Worried about spiralling home prices when talk of a collective sale started last year, she liquidated all her stocks in August to help pay for a $3 million apartment near Holland Road.
‘Prices in the area were going up by $200,000 every month. I got scared,’ Jane, 58, told The Sunday Times.
But selling her stocks was the right move – she cashed out before the stock market took a hit late last year.
If there had been no en bloc push, she probably would have held on to the stocks, she admitted.
Her family got a $120,000 share of the deposit the buyer had forfeited for Tulip Garden.
She noted that she was lucky. Her finances allowed her to buy another home without depending on money from the collective sale.
‘Those who do – and I know a few residents in this situation – may have some problems,’ she said.
Jane thinks Tulip Garden is still a good property because Farrer MRT station will be up in a few years. That could drive prices even further up, she said.
She will keep her unit and rent it out and move to her new home. She has an added reason to do so.
‘This en bloc issue has soured relationships between myself and some of the neighbours here because I didn’t want to sign for it initially. So I don’t want to stay here any more,’ she said.
Source : Sunday Times – 27 Apr 2008
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Makeway View - saved - developer (Bravo) pulled out
Makeway View en bloc deal falls through
Development charge higher than expected, says buyer
The $162.8 million collective sale of Makeway View in the Newton area to an associate of Bravo Building Construction has been rescinded.
BT understands that the one per cent of purchase price paid by Bravo so far has been forfeited.
A Bravo spokeswoman told BT yesterday that it had earlier sought payment extensions to ascertain the quantum of development charge (DC) payable.
Confirming the move to rescind the sale, she added: ‘We decided not to proceed with the Makeway deal as the actual DC turned out to be higher than what we had been told. So the breakeven price would end up being much higher than what we expected. That’s why my partner (in the proposed acquisition) decided not to proceed further.’
She confirmed that the initial information about the DC did not come from Knight Frank, which was the marketing agent representing the owners of Makeway View.
The $162.8 million deal for Makeway View announced in early November last year, reflected a unit land price of about $1,583 psf ppr including an estimated $21.5 million DC at the time.
Bravo group was one of the biggest buyers of collective sale sites last year, with deals like Tulip Garden for $516 million. Bravo formed separate associate companies for the acquisitions of the various collective sales sites, as the plan was to have different partners for each project.
A Bravo associate has so far paid the initial 5 per cent deposit on Tulip Garden, amounting to about $25 million.
Tulip Garden’s collective sale was approved by STB in late February and the Bravo associate was supposed to have made the second 5 per cent payment shortly after that. However, it requested for an extension on this till early April.
Bravo’s spokeswoman said her company is seeking a further extension to early June to pay this sum and to also extend the completion deadline for the deal from late May currently to early August.
‘We need time to sort out an agreement with our partner and at the same time, sort out the financing arrangement.’
Tulip Garden’s owners are expected to meet this weekend to decide whether to give the payment extensions. Tulip Garden’s price works out to $1,018 psf per plot ratio price (no DC is payable).
Source : Business Times – 1 Apr 2008
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Pender Court - saved - developer (Bravo) pulled out
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Finland Gardens - saved - developer/majority didn't appeal STB decision
