The 618 apartment owners will get between S$2.238 m and $2.122 m each, making the whopping deal the highest for a collective sale.

June 29, 2007
AsiaOne

Property giant CapitaLand has agreed to buy Farrer Court for S$1.34 billion ($872 million) which it plans to redevelop as luxury apartments.

The 77,898 square metre (838,488 square feet) site, sold through a collective sale, is in one of Singapore's prime residential districts. Their owners will get between $S2.238 million and $2.122 million each, depending on the size of thier flats, which range from 1,453 sq ft to 1,616 sq ft.

The deal fell short of the owners' asking price of $1.5 billion. But it signals how high and how fast priceds have risen this year.

Farrer Court owners had revised their reserve price from S$700 million to $840 million at the start of the year, only to push it up to $1.2 billion in March, according to a Straits Times report today.

Thanks to a surge in property prices, Singapore's developers are scrambling to buy up buildings in prime sites for redevelopment as more profitable, high-rise projects.

CapitaLand, Southeast Asia's biggest property developer, said it would form a consortium with Singapore's Hotel Properties Ltd. and Wachovia Development Corporation, a wholly-owned subsidiary of U.S. financial services group Wachovia, as well as with a foreign fund, to develop the project.

The Farrer Court site, which is 30 years into a 99-year lease, consists 618 apartments, and will be redeveloped as 1,500 luxury flats for launch in the first half of 2009, CapitaLand said in a statement.

CapitaLand said the total acquisition cost works out at between S$762 to S$783 per square foot per plot ratio.

The transaction is expected to be completed by Q2 2008.

CapitaLand said its latest acquisition of Farrer Court will increase the size of the residential landbank the group is managing in Singapore to about 5.5 million sq ft of potential gross floor area.

The tender for Farrer Court, which closed yesterday afternoon, attracted one other bidder - believed to be GuocoLand, which earlier this year bought the nearby freehold Leedon Heights site for $835 million or $1,062 psf per plot ratio.

Farrer Court is the only private residential site in the area accorded a high plot ratio of 2.8 and a maximum height of 36 storeys. Most of the surrounding sites are designated for either landed housing or low or medium-rise developments.

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