Shunfu Ville estate sold for $638m

The Shunfu Ville estate in Bishan has been sold for $638 million, with many of its owners reaping a tidy profit.

The price works out to an average price of $1.782 million for owners of the 358-unit privatised Housing and Urban Development Company (HUDC) estate.

That is almost 50 per cent above the typical value of a unit on its own, said Ms Yong Choon Fah, national director of capital markets at JLL, which brokered the sale.

It is the third largest en bloc sale and the first in nearly a year since Thong Sia Building off Orchard Road. It is buyer Qingjian Realty (South Pacific) Group's first en bloc purchase in Singapore since it began developing projects here eight years ago. The deal was struck by private treaty on Thursday, after about 81 per cent of owners agreed to lower the reserve price from $688 million to $638 million.

"We are very happy. I feel it's the right thing for Shunfu Ville - we are an ageing estate of about 30 years now, in a very good location and underutilising our plot ratio," collective sale committee chairman Woo Hon Wai told The Straits Times.

The last collective sale of this scale was in 2007, when the former Farrer Court, another privatised HUDC estate, sold for about $1.34 billion.

Ms Yong of JLL noted that the size of the Shunfu Ville plot offers the developer a development pipeline similar to it landing two or three sites from the Government.

Qingjian expects to build over 1,000 condo units and even some terraced units on the 408,927 sq ft site. The land has about 70 years left on its lease and a plot ratio of 2.8.

Qingjian expects to pay about $123 million in differential premium for intensifying land use and another $94 million to top up the lease in addition to the $638 million sale price. Overall, it is paying about $747 psf per plot ratio (psf pr) for the site, lower than the $791 psf pr the original reserve price would have entailed.

This is comparable to prices at recent Government Land Sales (GLS) sites, noted Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. The Toa Payoh site of the future Gem Residences went for $755 psf pr last year, for example.

But whether another en bloc could come soon depends on pricing and site attributes. For developers, en bloc sales also tend to be a more tedious way of getting development sites, in comparison with GLS sites - the sale process is lengthier while developers must factor in demolition cost as well.

Yet, given the current soft market, a longer sale process could suit a developer too, Mr Sim said.

Shunfu Ville was first put on sale last September with a minimum price of $688 million or $791 psf pr.

The tender closed last October with no formal bids but two letters of interest, including one by Qingjian. It was relaunched for tender at the same price in late January, again receiving interest from two developers.

Qingjian noted yesterday that its first development project in Singapore, Natura Loft, is just across the street from Shunfu Ville. "Our prior experience in Bishan-Thomson gives us confidence in this development," said Mr Li Jun, general manager of Qingjian. The market is also now much healthier than about five years ago and the result of cooling measures is that developers now have a clearer view of buyer demand, Mr Li added. Given this and the long-term warm reception to the area, "we believe the size of the project will not be an issue", he said.

Owner Teo Chong, 77, said he enjoyed the convenience of the project but noted that repair costs had been more onerous since the estate was privatised in 2013. Owner James Law, 74, who bought his unit for less than $230,000 back when Shunfu Ville was first launched, said he would miss the place. "We're a close-knit community and that is difficult to replicate."

Singapore, 27 JANUARY 2016 – Shunfu Ville, a 358-unit residential development in the popular Bishan/ Thomson area, has just been relauched for tender by sole marketing agent JLL.

Shunfu Ville comprises three 16-storey apartment blocks and three low-rise blocks of 6-storey masionettes. It covers an area of approximately 408,927 sq ft and was built in the late 1980s. Under the Master Plan 2014, Shunfu Ville is zoned 'Residential' with a Gross Plot Ratio (GPR) of 2.8 and could potentially yield about 1,100+ units with an average size of 1,000 sq ft.

Said Ms Yong Choon Fah, National Director, Capital Markets, JLL: "At the recent Siglap Government Land Sales (GLS) site, there were eight bidders, with the winning bid at $624.18 million or $858 per square foot per plot ratio (psf ppr),. This shows that developers are still keen on the Singapore residential market, and if the land offering is attractive, they can form joint ventures to bid for it even if the overall quantum is large."

Ms Yong added: "URA's trigger of the New Upper Changi Road/Bedok South Avenue 3 (Parcel B) site for sale by public tender just a few days ago also further supports the view that developers are keen on well-positioned sites that are attractively priced."

"The reduction to three residential sites on the confirmed list for the GLS Programme for the first half of 2016 presents a window of opportunity for the owners of Shunfu Ville. There has not been any GLS site within the Bishan/Thomson area for sale since the award of the Lorong Puntong site (Thomson Impressions) in Oct 2014. Based on the latest caveats lodged on URA, about 73 per cent of the units launched for sale at Thomson Impressions have been sold at an average selling price of about $1,400 psf. A further 79 per cent of the supply from GLS sites (sold since 2011) in District 20 have found buyers. As such, we believe that Shunfu Ville is an attractive site for developers keen to replenish their land bank."

More than 80 per cent of Shunfu Ville's owners have inked their consent to the collective sale with expectation of offers in excess of the minimum price of $688 million. This minimum price translates to a land rate of approximately $791 psf ppr on the potential GFA, inclusive of differential premium payable to the State to top up the lease to a fresh 99 years and for intensification of site. At this rate, the estimated breakeven cost for the successful purchaser should be around $1,250 psf, with the new units expected to fetch between $1,400 psf and $1,450 psf.

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"Shunfu Ville has many positive attributes - the Thomson/Bishan address, breath-taking views of the tranquil waters and lush greenery of MacRitchie Reservoir Nature Reserve, the MRT connectivity, the comprehensive suite of amenities and a range of educational institutions are strong pull factors for buyers which the successful tenderer can leverage," Ms Yong commented.

The site is just 200 metres from Marymount MRT Station on the Circle Line and about 600 metres from the upcoming Upper Thomson MRT Station on the Thomson-East Coast Line, expected to be completed in 2020. A wet market and hawker fare are also available from Shunfu Mart, just across the site. Besides boutique cafes along Upper Thomson Road and popular shopping malls nearby such as Junction 8 and Thomson Plaza, residents can enjoy easy access to medical facilities at Mount Alvernia Hospital. Young families could consider enrolling their children in Catholic High Primary, which is located within a 1km radius of Shunfu Ville, or other reputable schools such as Ai Tong School and Raffles Institution, both which are also located within the vicinity. Golf enthusiasts can also look forward to the 18-hole public course slated to be carved out of the Singapore Island Country Club in 2022, which is a mere eight-minute drive from Shunfu Ville.

PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

Shunfu Ville estate sold for $638m

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