Source : The Straits Times, March 12, 2009

Opposers of $219m deal change mind after 18 months, in wake of slumping market

WHAT a difference 18 months makes.

Back in September 2007, some owners of shop and office units in Katong Mall, which grew to a group of 23, banded together to fight against a proposed collective sale of the shopping complex.

The four-storey complex at the junction of Joo Chiat and East Coast roads, occupied by 258 shops and offices, is the first full-retail development to be sold en bloc. Many of the originally dissenting owners are now looking at a windfall, considering the continued economic downturn. -- ST PHOTO: DESMOND WEE

Some were attached to the place, others were concerned that the offered price was too low for them to buy replacement units elsewhere. The group was even considering court action to challenge the draft sale agreement.

Then the economic crisis barrelled in in the middle of last year. By the year-end, the property market had gone soft.

This was when the offer price of $219 million for the mall at the junction of Joo Chiat and East Coast roads, set before the downturn, started to look pretty good.

Now, the objectors have made an about-turn, and the deal has been sealed.

At a hearing on Tuesday, the Strata Titles Board (STB) approved the collective sale application, marking the end of an 18-month tussle between the sale committee and the objectors, who now get what might be considered a windfall, considering the uncertain times. Several mediation sessions were held by the STB in the last three months, which led to the deal now accepted by the objectors.

With it, Katong Mall, a four-storey complex occupied by 258 shops and offices, is the first full-retail development to be sold en bloc. Other collective sales have been for residential developments or those with a residential-retail mix.

Drew & Napier lawyer Adrian Tan said Katong Mall represented the first such deal he knew of in which the opposers' objections were withdrawn before the hearings at the STB even started.

'Credit must go to the STB for managing the mediations smoothly,' he said.

In the Katong Mall saga, some minority sellers were uneasy that the buyer, Tuan Sing Holdings, owned 72 per cent of the units through two subsidiaries, making it the majority seller.

The retail units in the mall range from 10 sq m to 2,436 sq m in size.

Lot owner and lawyer Jeannette Aruldoss, who was among the objectors, said the change of mind made commercial sense as 'we were overtaken' by events in the market. Those who had difficulty finding replacement units now realised it was no longer the case, given the changed market, she added. Average prices for commercial space have fallen 5 to 10 per cent in the last half a year, said property consultant Nicholas Mak.

Ms Stella Hoh, the investment director of property consultants Jones Lang LaSalle, which brokered the sale, said it was a 'win-win' deal as it gave the sellers a premium on their lots, while also giving Tuan Sing total control over the tenant mix, unlike before.

This will be changed so the mall serves the growing residential developments in the East Coast; Tuan Sing also plans to put $40 million into major renovations.

Its chief financial officer Chong Chou Yuen said: 'We are in for the long term and are quite optimistic about the long-term returns for the mall.' Tenants are expected to move out by the year-end.

Source : The Straits Times, March 12, 2009

A HOUSING Board sale of new flats in Woodlands has attracted strong demand, with bigger flats keenly sought after.

Champions Court is at the junction of Champions Way and Woodlands Avenue 1 and near the Woodlands Regional Centre. -- SOURCE: HDB

Champions Court, a build-to-order (BTO) project, closed yesterday with 3,239 applications for just 815 units. The final update will be made at 2pm today.

The 224 studio apartments - offered for the first time in Woodlands - drew 632 applications, while 422 potential buyers chased the 182 three-room flats. Studios are priced indicatively from $57,000 to $80,000, with the three-roomers at $118,000 to $142,000.

The 224 four-room flats - from $194,000 to $227,000 - attracted 1,239 applications. The 185 five-roomers, which will cost about $247,000 to $296,000, received 946 bids.

PropNex chief executive Mohd Ismail said the robust demand for the four- and five-room flats was expected, given that they are in a mature estate and priced affordably.

Champions Court is at the junction of Champions Way and Woodlands Avenue 1 and near the Woodlands Regional Centre.

The HDB had earlier provided data that showed that comparable four-room resale flats in Woodlands were selling for $255,000 to $278,000, while five-room resale units went for $304,000 to $345,000.

The overall median cash-over-valuation for a resale flat in Woodlands was $15,000 in the fourth quarter of last year.

A sale in a more central part of Singapore is unlikely to attract the same level of demand as the flats would be priced at a higher quantum, said Mr Ismail.

'Whoever applies now will be stuck with it for eight years, including the construction and minimum occupation periods,' he said.

'Therefore, a three-room flat may not be ideal for a family with kids, in today's affluent society.'

Source : The Straits Times, March 12, 2009

THE $35.8million sale of a Mohamed Sultan Road building has been completed, six months after the contract was first signed.

Ka$h completed the purchase of Le Mercier House even though the deal was struck in better economic times. -- PHOTO COURTESY OF ISABEL REDRUP AGENCY

The acquisition by Ka$h International of Le Mercier House at 65 Mohamed Sultan Road is rare today given the depressed state of the property market, said Isabel Redrup Agency managing director Susan Ye. Her property agency brokered the deal.

Ka$h already owns the site next door, which houses the Hansgrohe showroom.

Although the deal was clinched with seller Le Mercier's Fine Furnishings during better economic times, Ka$h went through to completion and at the agreed price, added Mrs Ye.

Le Mercier has occupied the four-storey building for the past decade and is still running its high-end furniture store there.

It will rent the space from Ka$h - whose major shareholder is Mr Cheong Keng Hooi - but is looking for more upmarket premises.

Mrs Ye said the property is zoned for warehouse/residential use and can be converted into a 15-storey block of apartments.

The land size is 14,200 sq ft and the current built-up space is around 52,000 sq ft. However, the site is over-built.

'It has a plot ratio of 2.8, so rebuilding it will not allow for more than 39,000 sq ft of gross floor area in the future,' she said.

However, the location is desirable for those who like to live close to Orchard Road but outside the ERP zone, she said.

Many investors steered clear of the market for much of last year but are now starting to return, said Mrs Ye.

She added that they were a mixture of both individuals and companies.