Pine Grove’s S$1.78 billion en bloc attempt could get fresh start under opt-in to new rules

[SINGAPORE] Pine Grove, a 660-unit condominium in its fifth attempt at a collective sale, could get a leg up from new rules which would lower the consent hurdle it faces from 80 per cent to 70 per cent.

While the existing collective sale framework will continue to apply where signature collection has already started, developments aged 40 years and older that are in transition have an “opt-in route” to restart the process under a new framework discussed in Parliament on Tuesday (Sep 8).

Pine Grove’s current collective sale agreement (CSA) is due to lapse on Sep 20.

As at late August, some 67.5 per cent of owners had signed the agreement, well short of the existing 80 per cent mandate but just shy of 70 per cent.

For developments aged 40 years and older that are still gathering signatures, owners “may convene a general meeting to decide whether to terminate the existing collective sale agreement and proceed afresh under the new framework”, Minister for Law and Second Minister for Home Affairs Edwin Tong said in Parliament on Tuesday.

Under the transitional arrangements, developments that opt in will have seven months from the commencement date to achieve the requisite consent threshold.

“This provides collective sales committees (CSCs) with a meaningful opportunity to opt into the new framework, while ensuring that owners who do not wish to sell are not subjected to a prolonged process,” Tong added.

Owners are weighing the rising costs of maintaining the ageing estate, which sits on a sprawling 893,219 square foot site off Ulu Pandan Road.

Marketing agent ERA has estimated that the site could yield about 2,050 homes if redeveloped, subject to approval from the authorities.

Its current reserve price is S$1.78 billion, which excludes any land betterment charge that may be payable by the developer to redevelop the site.

The Business Times understands the CSC recently told owners that if the collective sale fails, major repairs and replacements could cost an estimated S$15 million to S$21 million, equivalent to about S$22,000 to S$32,000 per unit.

The estimates include:

Monthly maintenance fees have also risen to S$479.60 from S$318.28 from August, with the CSC projecting further annual increases.

In July, the government announced that developers of “mega” en bloc sites of at least 1,400 units will have the deadline extended by two years, bringing the additional buyer’s stamp duty (ABSD) remission timeline to seven years.

Developers must sell at least half the units within six years, or risk a clawback, with interest, of the 35 per cent upfront ABSD remission component.

Industry observers previously told BT that the longer runway will put large collective sale sites back on developers’ radar, although pricing remains the biggest hurdle.