People’s Park Centre, People’s Park Complex Eye En Bloc Sale
SINGAPORE – Two mixed-use developments in Chinatown, the People’s Park Centre and the People’s Park Complex, are making a collective sale attempt, reported The Business Times on Wednesday evening (June 14, SGT).
Under the 2019 Master Plan, the site of People’s Park Centre measures 95,467 sq ft with a gross plot ratio of 8.6. Apart from a car park, it consists of 120 residential units, 256 office units, and 324 retail units.
Located about 300 metres away is the People’s Park Complex, a strata-titled project comprising a 6-level podium with shops and offices, along with a 25-storey residential block with 288 units. Built in 1971, the 99-year leasehold project stands on a site spanning 114,000 sq ft, with a gross plot ratio of 5.6 and a gross floor area (GFA) of about 623,700 sq ft.
The latest move represents the first collective sale attempt of People’s Park Complex, whose collective sale committee (CSC) is obtaining consent from the unit owner.
As for the People’s Park Centre, it’s their third en bloc sale attempt. This time, their CSC is targeting a reserve price ranging from S$1.5 billion to S$1.7 billion, disclosed Committee Chairman Koh Yam Khoon.
The committee intends to commence the process of gathering signatures for the mandatory 80 percent of the unit owners soon, he shared.
Previously, unit owners at People’s Park Centre had attempted a collective sale in 2022, with an asking price of S$1.8 billion, but the tender closed without any takers. The price tag translated to a land rate of S$2,620 psf per plot ratio, and factored in the differential premium and the premium to refresh the land tenure to 99 years.
“We have not been successful not because of our strategy, but because of the high reserve price,” Koh explained.
The 2022 attempt came three years after the first en bloc sale attempt of the People’s Park Centre, during which the owners tried divesting the 99-year leasehold property for S$1.35 billion. The price was subsequently increased to S$1.5 billion, but they failed to obtain the consent of at least 80 percent of the unit owners back then.
However, the latest collective sale attempts face a challenging environment. In Knight Frank’s investment sales report in April, it found out that only about 33 percent of en bloc sale attempts have succeeded in the current 2021/2023 sales cycle, down from the 63 percent success rate seen during the 2017/2018 boom cycle.
Experts attributed the lower success rate to a mismatch of price expectations in the market, with a price gap of up to 15 percent between what unit owners are asking for and what property developers are willing to pay.