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The university - which holds the key to a collective sale as it controls slightly more than half of share values in the project - is being pressured to finalise an agreement soon to launch a sale of the privatised HUDC estate.

 

BT understands that the university had earlier indicated it would not hold up a collective sale but is still studying the terms for a sale. However, some of the other owners fear it may take too long and they could miss the en bloc boat if developers decide to slow down on landbanking.

 

If NUS gives the nod, the owners of the privatised HUDC estate would secure the minimum 80 per cent consent level to put the 836,425 sq ft leasehold site on the market.

BT understands NUS owns 305 apartments in the condo, which comprises four high rise blocks of 24 storeys each with a total of 455 units and six low-rise blocks with 152 maisonettes. There is also a shop unit, bringing the total number of units in the development to 608.

 

Sources say the asking price of about $528 million works out to a unit land price of $323 per square foot of potential gross floor area, including an estimated $36 million payable to the state for upgrading the site's lease to 99 years from a remaining tenure of about 78 years and a further payment of $3.5 million for a slight enhancement in plot ratio.

The site is zoned for residential use with a 2.1 plot ratio (ratio of potential gross floor area to land area).

 

NUS told BT it has yet to make a decision. 'It is to our understanding that the proposed en bloc sale of Gillman Heights was initiated by some residents living there. The university is evaluating the information and would be taking this up with our management and Board of Trustees before making any decisions on whether to agree to the collective sale of the residential property.'

On average, owners stand to receive $870,000 per unit which is about 50 to 60 per cent more than the average value of what their units would fetch if sold individually.

 

The NUS spokesman said the university's apartments at Gillman Heights provide off-campus accommodation for some of its staff and graduate students. 'If necessary, and when appropriate, the university will then proceed to help them source for alternative accommodation,' he added.

Even if NUS gives the nod, and the collective sale is launched, it remains to be seen what sort of response the exercise will garner.

While developers have been snapping up land over the past six months or so, they've focused on the prime districts in response to a strong recovery in home buying in the luxury residential segment. As well, the Gillman Heights site is huge - a new project on the site can house around 1,400 apartments averaging 1,300 sq ft.

 

Not many developers have the financial muscle for such a big project. And even if they do, they may not wish to put all their eggs in one basket.

Also, the asking price set by the owners, which works out to a unit land price of $323 psf per plot ratio, would translate to a relatively high breakeven cost of at least $500 psf for the developer, say market watchers.