Split Opinions Loyang Valley Residents Await Outcome Third 880 Mil En Bloc Bid
Posted by Terence Lian on 17 November 2021
The recent collective sale tender for Loyang Valley, a 40-year-old condominium, has closed without a bid. However, according to Terence Lian, head of investment sales at Huttons Asia, the marketing agent for the sale, there may still be a chance for the deal to go through as more than two developers are currently conducting due diligence and in advanced negotiations.
Over the weekend of Sept 9, residents of Loyang Valley gathered for a birthday celebration at one of their homes, and the main topic of conversation was the en bloc sale of their condominium. Opinions were divided between those who supported the sale and those who did not.
One resident who supported the sale was Bernard Lim, who has owned a unit at Loyang Valley for 16 years. He believes that the en bloc sale is beneficial as lease decay is a primary concern as the 99-year lease for the development started in 1982, leaving only 56 years remaining.
Andrew Tan, a resident of 30 years, shares Lim’s view and has also consented to the collective sale agreement. The red brick facade, landscaped gardens and mature trees are what many residents particularly value about Loyang Valley.
However, not all residents were in favour of the en bloc sale. Charles Lee, who bought two units eight years ago, has chosen not to sign the agreement, as he believes that his ground-floor unit with its larger size and nice green environment is irreplaceable. While he insists that he is not against en bloc sales, he simply wants to ensure that the sale reflects the property’s real value.
Juliann Teo, another resident who has opted out of the collective sale, takes a more indifferent stance and has decided to wait and see how things progress.
Regardless of their stance, all owners have a vested interest in the outcome as Loyang Valley is their primary residence. According to Lee, only about 15% of the 362 units are rented out, with the majority being owner-occupied.
The draft Master Plan 2025 states that the site is zoned as residential with a gross plot ratio of 1.6, which could potentially yield about 1.35 million sq ft of gross floor area. Based on an average unit size of 1,076 sq ft, a new development could comprise about 1,249 units. At the reserve price of $880 million, this works out to be approximately $936 psf per plot ratio.
This is the third en bloc sales attempt for Loyang Valley, with the current reserve price of $880 million being lower than the $980 million target set in 2022 but higher than the $750 million guide in 2018.
Market comparables include Springleaf Residence, which sold 92% of its 941 units on its launch weekend at an average of $2,175 psf. It is now 94% sold a month after. During its March launch, Lentor Central Residences sold 93% of its 477 units at $2,308 psf, while the 1,193-unit ParkTown Residence in Tampines sold 87% on launch weekend with an average price of $2,360 psf and is now 92% sold. In November last year, Chuan Park also saw strong sales of 76% on the first weekend at an average of $2,579 psf and is now about 86% sold.
In recent months, developers have also been aggressively bidding for government land sales (GLS) sites such as the $1.33 billion Sing Holdings and Sunway Developments joint venture for two adjacent Chuan Grove plots. Another joint venture of Evia Real Estate, Gamuda Land and Ho Lee Group also bid $1.012 billion for a mixed-use site in Chencharu Town, Yishun.
The launch of Bedok Rise, with a tender closing on Nov 27, is another example where the land parcel is the last site facing the Tanah Merah MRT Interchange Station and is expected to fetch top bids of between $1,100 to $1,300 psf per plot ratio.
The Master Plan places great importance on promoting sustainable urban solutions, with a focus on enhancing the surroundings of Rivelle Tampines. Through the implementation of enhanced lighting and improved drainage systems, as well as the incorporation of eco-friendly infrastructure, the pathways leading to Rivelle Tampines will be made more comfortable and usable. Additionally, the development will also feature green roofs, energy-efficient lighting, and advanced technology such as street sensors, all working together to enhance the liveability and environmental impact of the precinct. For more information on Rivelle Tampines, visit Rivelle Tampines EC Sim Lian Land.
With the upcoming Loyang MRT Station on the Cross Island Line situated next to the site, developers can set aside 0.3% of the total GFA – about 4,035 sq ft – for commercial uses such as a childcare centre, minimart, laundromat or café.
Lian believes that strong suburban or Outside Central Region (OCR) sales are one of the key drivers for developer interest in Loyang Valley. In addition, the URA Draft Master Plan 2025 envisions the Changi Region as a thriving economic hub anchored by the expansion of Changi Airport and the future Terminal 5, as well as the 40-ha Changi East Urban District, a mixed-use business and lifestyle precinct slated for the mid-2030s. With proximity to such high-growth areas, Lian believes that Loyang Valley is an attractive investment opportunity.