Tags: d21 / pine grove

Pine Grove revisited

- August 27, 2014 No Comments

Someone asked about Pine Grove last evening. What are the chances of en bloc? Is it still worth getting a unit there?? 

The wife and I have not written specifically about Pine Grove since the demise of their last en bloc attempt in 2011. So we deemed this morning as an opportune time to revisit an "old friend" that was previously on our "buy" radar. 

 

The first thing that struck us when we arrive at Pine Grove was the amount of construction that is happening next to and across from the estate. Closer inspection revealed that these are for canal upgrading purposes - seemed like the PWD had finally decided that they ought to do something about those "once-in-50-year floods" that had already happened numerous times over the past 2 years.

 

 

Driving around the estate, we were once again greeted by the familiar sights of space and greeneries. And how many developments these days can actually boast of having 3-bedroom apartments of 1,600+ and even 1,700+sqft... and without PES at that?

 

However, the estate do look like it could use a fresh coat of paint. The wife and I are unsure when the last repainting exercise for Pine Grove was carried out but hopefully the next one will come soon (if not already!).

 

Looking at the transactional side of things, the wife and I discovered that   

·         There were only 55 transactions at Pine Grove over the past 3 years.  

·         Between August 2013 to August 2014, only 11 units were transacted. Out of these, 4 were for the 1,600+sqft units and 4 for the 1,755sqft units. 

·         The 1,600+sqft units were transacted at an average price of around $1.4 million. This seems to be holding steady throughout the past one year. 

·         The 1,755sqft units were transacted at an average price of around $1.55 million. However, it seems like prices for this unit type has been on the decline during the past year - from $1.588 million in Nov 2013 to the recent $1.5 million in Aug 2014. 

 

Now to provide our humble "non expert" opinions on the 2 questions asked:

What are the chances of en bloc?

There is always a chance, but the wife and I reckoned that it will be slim to none over the next 2 or even 3 years.  

The current depressed market sentiments, which is expected to worsen further over the next 2 years, is likely to stifle developers' interests in collective sale plots. This is especially for an estate such as Pine Grove, where the plot size is huge and the amount developers have to pay to top up the land-lease is substantial. And coupled with the new government ruling imposed on developers that all units within a new project must be built and sold within 5 years of site acquisition, this will definitely make them think twice about Pine Grove over the next 2 - 3 years.  

There is also the question of disparity between Sellers and Buyer expectations - the folks at Pine Grove have shown that they are only prepared to sell-out at the "right" price, while developers are not so convinced that the asking prices so far are "right". This probably explained the 3 previous failed attempts to en bloc. 

Is Pine Grove still worth the buy?

When the wife and I were considering the estate back in 2008 - 09, the 1,755sqft units were only asking for about $1.2 million (if our rusty memories served us right). However, those were different times then and we recalled one unit was subsequently sold for over $1.7 million when talks of en bloc were at its fever pitch back in 2010 - 2011. So prices have certainly came off a bit.

Our answer to this question is simply "If you are not buying it at the peak of the market and have the financial capability to hold on to the unit for the next 5 years or so, then it is probably a worthy buy". Having said that, there are not that many units available in the market going by experiences over the past 3 years. So even if you are prepared to pay the asking price, your choices are likely to be limited. This is especially if you are particular about the unit orientation, facing, high/low floor etc. 

 

Hope the above will be of some help to those looking at buying into Pine Grove!

Click on link below to access the URA caveats for Pine Grove from August 2011 - 13:
http://www.scribd.com/doc/237842542/Pine-Grove-Transactions-Aug-2011-Aug-2014

Tags: enbloc / pine grove

CNA Report: Pine Grove en bloc status

- May 9, 2011 No Comments

Three weeks after the close of a tender, Pine Grove condominium is still waiting for a bid.

The site's reserve price of $1.7 billion appears to be out of reach of potential buyers.

Analysts say a reserve price of around $1.275 billion may reflect current market demand.

Pine Grove's marketing agent Jones Lang LaSalle has kept quiet about the outcome of its tender.

However, Channel NewsAsia understands that Pine Grove, which has an independent valuation of $1.25 billion, has received at least one private offer.

Christina Sim, director of investment, Cushman & Wakefield, said: "A more realistic price would be some 20 to 25 percent below the $1.7 billion mark. The agents still have a good ten-week period to negotiate any private treaty sale from the date of the close of the tender."

According to analysts, $1.275 to $1.36 billion is a more realistic price for Pine Grove. But that will translate to smaller gains for residents.

Pine Grove has 660 units, ranging from 1,163sqft to 1,938sqft each.

Based on a reserve price of $1.275 billion, residents will receive from $1.57 million to $2.06 million, depending on the size of their unit. This is 25% lower than what they would have received at the original reserve price of $1.7 billion.

Analysts say residents of the 27-year-old property should go ahead with a lower offer.

Ms Sim said: "We must remember that Pine Grove is a 99-year leasehold property. And as time goes by, the property keeps depreciating. So right now, it actually makes a lot of economic sense for them to cash out."

Analysts expect Pine Grove be transformed into a mid- to high-end residential development.

But demand for mid- to high-end projects, which are commonly found in the central regions, remain muted.

Colin Tan, head of research & consultancy, Chesterton Suntec International, said: "For developers going for this niche market, there is this need to build their land banks.

"The question is how soon do they see the recovery or rather the take-off for this high-end sector again. It has taken off in 2007. Since then, it has cooled down and is slow in the recovery."

According to Urban Redevelopment Authority data, home prices in the central region grew 0.1 per cent this quarter, slower than the 2.5 per cent for suburban areas.

Source: Channel News Asia

So the million dollar question is: will the owners "bite" at the lower en bloc price?

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Tags: astor green / cavendish park / pine grove

Are you living in the Pine Grove area?

- April 22, 2011 1 Comment

The wife and I found this rather interesting report by Kim Eng Research while scouring the web for certain information about Cavendish Park & Astor Green.

Kim Eng Research (14042011)

We now know that there is over 3,300 private apartments around the Pine Grove area. Included in the report are the secondary market prices for developments in the area over the past 12 months (only 2 resales for The Trizon??).  It also provided information about the existing land banks of some of the major developers in Singapore. But conspicuously misssing from the list is Far East.

While on the subject of Cavendish Park and Astor Green, we believe the plot ratio for both is 2.1 (similar to Pine Grove). But can anyone tell us what is the land size for these two developments respectively?

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Tags: enbloc / news / pine grove

Enbloc News: Latest on Pine Grove

- April 20, 2011 166 Comments

According to the TODAY paper, the marketing agent Jones Lang LaSalle declined to comment if any bids were received for the tender, or when the results of the tender will be released. This is after the tender for Pine Grove - possibly the most expensive property to go en bloc - closed yesterday.

Are we being too presumptuous to think that if a bid was received at the $1.7 billion asking price, someone would have made an announcement by now....?



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Tags: enbloc / grand tower / pine grove

Pine Grove's DC is almost $500 million....!

- March 14, 2011 No Comments

And speaking of Development Charge (DC), a report in the TODAY newspaper today has revealed another possible stumbling block to the Pine Grove collective sale process.

The high development charge (DC) of nearly half a billion Singapore dollars for Pine Grove, which has been put up for enbloc sale recently, may be a turn-off and a potential deal breaker for some property developers.

Property analysts said that the site’s DC is about 9.5% higher at $460 million, in line with the rate hikes announced earlier this month.

Including the DC, analysts said Pine Grove’s total cost to a potential buyer works out to about $2.2 billion or $1,152psf ppr.

Pine Grove is just one of the enbloc properties affected by a higher DC rate.

And residents at enbloc properties may have to accept a lower reserve price to balance out the higher DC charge just to retain the attractiveness of the property’s total costs, said analysts.

The rise in DC will also eat into the seller’s profit margins – a trend that has been unfolding for the last four years.

“Previously, we were looking at as high a profit margin of 50 to 100% but now, if you get a margin of 15 to 30%, I think you’re considered quite lucky”, said Ms Christina Sim, director of investment at Cushman & Wakefield.

Analysts say the DC’s rate of increase depends on the transacted prices in the particular area over the last six months.

In areas like Upper Serangoon Road and Punggol, DC for non-landed properties has increased by 17%.

Non-landed properties in prime areas like Holland Road, Sixth Avenue and Farrer Road have risen by 25%.

Properties with no DC should benefit both developers and residents, analysts said.

For instance, Novena condominium Grand Tower, which has also been put up for collective sale, will seem more attractive to developers. This is because it is much smaller compared to Pine Grove and is selling for $92 million with no DC.

Each owner of the 28 units should receive a tidy $3.28 million from the sale.

Call us wet blankets if you must, but the wife and I are certainly not holding our breaths on the Pine Grove enbloc...

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Tags: enbloc / pine grove

Enbloc news: Pine Grove

- March 7, 2011 No Comments

Yes, the wife and I are back and the enbloc for Pine Grove is finally happening!

According to a CNA report today, Jones Lang LaSalle has put up what it calls "the largest en bloc site" for sale by tender.

Pine Grove has a site area of around 893,000 square feet and is zoned for "residential" use.

Jones Lang did not provide an indicative price for the site but CNA reported in November last year that the site has an estimated reserve price of S$1.7 billion.

The property consultancy firm said the site has a gross plot ratio of up to 2.1 and can be redeveloped into a residential development of up to 24-storeys with a gross floor area of near 1.88 million square feet.

That translate to some 1,500 apartment units with sizes of about 1,200 square feet.

Jones Lang said the surrounding area comprises of prime residential developments and renowned educational institutions.

It added that the land would appeal to consortiums as it could be redeveloped into a landmark development or be divided into several smaller parcels for different or phase development.

Looking ahead, the marketing agent also said that despite the recent cooling measure, it is confident that the demand for en bloc sites would remain strong as the surge in foreign home buyers due to key recovering economies, could fuel the take up rates.

The tender will close at 3pm on April 19.

Third time lucky for Pine Grove, perhaps?


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Tags: pine grove

Just in case your thinking about the $2.4 million Pine Grove unit...

- December 25, 2010 No Comments

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If you have been reading the Straits Times' Classified over the past few weeks, you might have come across several adverts on units for sale at Pine Grove. These are probably owners who are trying to cash out after the en-bloc announcement.

For those who have been following the local property market news (or our blog), you will know that Pine Grove is going en-bloc with a reserve price of $1.7 billion. This could work out to between $2.1 million and $2.75 million per unit, depending on the size of the apartment and the development charge.

The wife and I are particularly amused by this advert:

Assuming owner of a 1700+sqft unit (which we understand is the larger unit type in the development) will eventually get $2.7 million when en-bloc happens, you are asking someone to splash out about $2.4 million now in the hope of getting $2.7 million later. And if the en-bloc fails (again), the unit will probably revert back to the current market price of $1.5+ million (or lower, depending on market condition then). So we are looking at a possible upside of $300K versus a massive downside of $900K.

Good investment?! We'll let you consider the maths...

Granted that a seller is entited to quote whatever price he desires. But then again, one should not assume that the rest of the world is... well... intelligently-challenged.

Smiley Face

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Tags: enbloc / news / pine grove

En-bloc news: Pine Grove

- November 17, 2010 No Comments

It could be third time lucky for Pine Grove along Ulu Pandan Road.



The 99-year leasehold estate could be up for collective sale again with an estimated reserve price of $1.7 billion, said Channel NewsAsia yesterday.

The deal, if successful, would be the largest in the collective sales market since Farrer Court changed hands for $1.34 billion in 2007.
Channel NewsAsia said that property agents have been gathering residents'signatures since November last year, and they have amassed 80% of votes for the collective sale to start.
The next stage of the en-bloc attempt is the preparation of tender documents, but the votes have to be first audited by the appointed law firm Lee & Lee.

There is also a "cooling off" period where residents who had signed can withdraw their consent to sell within a week.

It is understood that Jones Lang LaSalle, which is the marketing agent, is unlikely to launch a sale this year, and will likely wait for more favourable market conditions.

Analysts believe that potential buyers are likely to take a consortium or joint-venture route so as to spread the risk.

A collective sale also faces challenges from a successful Government Land Sales programme.

"Developers sometimes prefer the straight forward government sale of sites," said Donald Han, vice chairman, Cushman & Wakefield, Singapore. "The collective sale process on the other hand can become protracted."

The 660-unit Pine Grove is a former HUDC estate, which covers over 893,000 square feet of land area. Several discussions had taken place between agents and residents to sell the estate in the last few years. The en-bloc fever was particularly strong in 2007 as the property market heated up and developers snapped up several estates.

The collective sales market took a breather during the financial crisis and has revived recently, but deals have involved mostly smaller estates with more affordable price tags.
Pine Grove's reserve price of $1.7 billion could work out to between $2.1 million and $2.75 million per unit, depending on the size of the apartment and the development charge.

The current record for an en-bloc sale is held by Farrer Court, located along Farrer Road, also a former HUDC estate. It was sold in 2007 for $1.34 billion, and had a development charge of about S$500 million.

Observers said Pine Grove could attract a similar development charge.

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