Cairnhill Mansions up for en bloc sale

Published 11 April 2011
The Business Times
By Kalpana Rashiwala

$361.5m reserve price for 43,103 sq ft site lower than in earlier sale attempt

A PLUM District 9 freehold residential development plot has been put on the market in the form of a collective sale of Cairnhill Mansions. The reserve price for the 43,103 square feet site, to be marketed through a tender exercise, is $361.5 million or about $2,308 per sq ft of potential gross floor area.

Cairnhill Mansions up for en bloc sale

Cairnhill Mansions: Analysts estimate that the breakeven cost for a new project on the site could be about $3,000 to $3,100 psf

This is lower than the guide price of $443.6 million, which would have worked out to about $2,833 per square foot per plot ratio (psf ppr) for the property in an earlier en bloc sale attempt in late 2007/early 2008.

No development charge is payable for Cairnhill Mansions, which is zoned for residential use with 2.8 plot ratio (ratio of maximum potential gross floor area to land area) and 36-storey maximum height under Master Plan 2008. The new owner of the site can build up to Cairnhill Mansions’ existing gross floor area of 156,581 sq ft, which reflects a plot ratio of 3.6327.

Analysts estimate that based on the $2,308 psf ppr reserve price for Cairnhill Mansions, the breakeven cost for a new project on the site could be about $3,000 to $3,100 psf.

A new project in the location could sell at an average price of about $3,500 psf if it were to be launched today, reckon property consultants.

In February, a 3,057 sq ft apartment at the nearby Ritz-Carlton Residences sold for $3,762 psf, while a larger unit of 6,501 sq ft in the same project fetched $4,307 psf. At Tomlinson Heights, a 2,734 sq ft unit sold for $3,238 psf and at Scotts Square, a 947 sq ft apartment achieved $4,626 psf in the same month, according to caveats data.

The highest price paid for freehold residential land in Singapore was $2,525 psf ppr for the collective sale of Westwood Apartments at Orchard Boulevard, inked in November 2007.

CB Richard Ellis is handling the tender for Cairnhill Mansions’ collective sale, which closes on May 31.

The property consultancy group’s executive director (investment properties) Jeremy Lake said: ‘There hasn’t been a super luxury residential site launched for collective sale since the sale of Westwood Apartments. The market has not seen an offering like Cairnhill Mansions for the best part of three years. This tender will also be a test of where land prices are for super luxury sites.’

He also noted that the pool of buyers for private sites above $500 million is quite small, whereas a site priced in the $350 million region would be affordable to more players.

According to CBRE’s data, 10 collective sales were inked in the first quarter of this year, totalling $654 million. The tally for the whole of 2010 was 32 deals, adding up to $1.73 billion.

Cairnhill Mansions, which is 40 years old, comprises 60 apartments of about 2,024 sq ft each, and a penthouse of 8,525 sq ft. Owners of the apartments should pocket about $5.7 million each while the penthouse owner will receive around $15.1 million, based on the reserve price.

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