Whitley Heights enbloc: Sign of things to come?

By The Folks @PropTalk - June 16, 2011 5 Comments

The owners of Whitley Heights, just off Whitley Road, are re-launching their estate for tender at a lower price.

Credo Real Estate, which is handling the collective sale exercise, revealed yesterday that the first attempt in January this year was unsuccessful.

The offers received for the 130,165sqft freehold site in one of Singapore’s prime neighbourhoods, District 11, were below the owners’ initial reserve price.

“Earlier, the owners were hoping to achieve between $185 million to $120 million, which reflected a land rate of $1,421 to $1,613psf,” said Credo managing director Karamjit Singh.

Now, they have lowered their price target to $165 million, or $1,268psf, he said.

More than 80% of the owners have consented in writing to the reduced reserve price.

Asked if the tender would be successful after the adjustments, Mr Singh said he remains optimistic.

“It should be all right because the owners have made a significant enough adjustment to attract developers’ interest,” he said.

“At $165 million for the land, the developer may expect to break even at around $3 million per strata terraced. They should be able to sell the new strata units at an average of $3.6 million to $3.7 million per unit.”

Whitley Heights is a stone’s throw from the large houses in Chancery Lane and a number of top schools.

Analysts reckon the unsuccessful tender earlier this year is not so much reflective of the current market, but more of the nature of the site and its development uses.

When most residential apartment sites go en bloc, they are typically redeveloped into high-rise condominium units.

But for Whitley Heights, the site – which currently houses a 45-unit condo development – is to be redeveloped into two-storey landed homes.

This means the developer of the site could choose to build a combination of conventional terraced, semi-detached and detached houses, as well as strata terraced, strata semi-detached houses and strata bungalows.

This implies potentially less “intensive” use of the land for any developer, said SLP’s head of research, Mr Nicholas Mak.

“The en bloc sale premium could be less, as a result, for the developer,” he said.

The tender for Whitley Heights closes at 2.30pm on July 8.
Source: The Straits Times

A couple of thoughts came to mind after reading the article:

• A reduction from $185 million to $165 million – that equates to a discount of about 11% or over $400k less per household (assuming all 45 units are of equal size). Owners of Whitley Heights are definitely motivated sellers!

• Even if the original intention is to redevelop Whitley Heights into two-storey landed homes, surely this is not set in stone (or is it?). Would the buyer not have the option of building condos (albeit low-rise, as we believe there is height limitation on the site) if they feel that this will bring them better returns? So at the end of the day, wouldn't the cause of the initial failed enbloc attempt be the (high) reserved price (which is a function of what developers are willing to accept based on current market) rather than nature of the site and its development uses?

• More interestingly, will we see the likes of Pine Grove and Pearlbank Apartments following suit and start dropping their reserve prices in their next round of sale?


5 comments to ''Whitley Heights enbloc: Sign of things to come?"

  1. The site that Whitley Heights sits on is zoned as '2-storey Mixed Landed' in the 2008 Master Plan. Can't build a condo more than 2 storeys high because of this zoning restriction so I think landed homes is still the best redevelopment option.

  2. The Folks @PropTalkJune 28, 2011 at 7:51 PM

    Hi Alex,

    Many thanks for the clarification.

    However, isn't the existing development at least 3-storey high?

    We must admit we have not been to Whitley Heights condo ourselves but the photos that we have seen seem to suggest so.


  3. Hello!

    I think Whitley Heights is indeed 3 storeys high. But a check on PropertyGuru suggests that it was completed in 1987 so the zoning restriction must have been introduced after that.

    If I'm not mistaken, the zoning restriction will have no effect on existing developments but redevelopment projects need to be compliant.

  4. The Folks @PropTalkJuly 3, 2011 at 6:56 PM

    Hi Alex,

    Pardon our ignorance but where did you manage to find the zoning info in the 2008 Master Plan? We tried but were unable to locate this.

    However, we know that Whitley Heights has an existing plot ratio of 1.4 under the 2008 MP, which is normally good for a built-up height of up to 4 storey.


  5. Hope you had a good weekend!

    You actually have to refer to the Landed Housing Areas Plan which you can see at http://www.ura.gov.sg/uramaps/ (third item in the MasterPlan menu at the top left corner).

    I think URA wants to preserve the area as a landed housing estate. Otherwise many landed housing estates will become condo estates.

    Any plans to visit Woodhaven, Miltonia Residences and Seastrand?