Amber Park on the market for $744 mil

/ The Edge Property |

June 17, 2015 9:00 AM SGT

Join our Telegram channel and follow our Facebook for the latest update.

SINGAPORE: The owners of the 200-unit Amber Park located at 14 and 16 Amber Gardens hope to be third time lucky in their latest attempt at a collective sale.

They plan to launch their collective sale on June 6.

If successful, it will be the largest deal of its kind this year.

Amber Park sits on a site area of 213,676 sq ft.

“We haven’t had such a large plot of land put up for en bloc sale since last year, when Spring Grove on Grange Road attempted an en bloc for $1.39 billion,” says Michael French, managing director of Asia Premier Property Consultants, the marketing agent handling the collective sale of Amber Park.

“And Spring Grove is 99- year leasehold, while Amber Park is freehold.” The most distinctive feature of Amber Park is its cupcake-shaped balconies.

The project consists of twin 27-storey towers with 100 units each.

There are 192 typical units of 1,744 sq ft and eight duplex apartments of 3,789 sq ft.

Completed in 1986, the project was developed by listed property giant City Developments Ltd, which developed many of the earlier condominiums in the Amber Gardens- Amber Road neighbourhood.

With a plot ratio of 2.8, Amber Park can be redeveloped into a new condo project with a maximum gross floor area of 607,481 sq ft.

Assuming an average size of 70 sq m for each new unit, a buyer can build a brand new condo of 600 to 700 units, estimates French.

Landbank He sees it as an ideal opportunity for developers to boost their land bank.

“Developers have been forced to rely on government land sales [GLS] for big land parcels,” reasons French.

“But they won’t be able to buy a freehold plot of land in prime district 15 located just opposite the Chinese Swimming Club, Parkway Parade mall, and minutes’ drive to the CBD, Marina Bay and Changi Airport.”

The future MRT station on the Thomson- East Coast Line will also be located within walking distance of Amber Park, while the tunnel leading to East Coast Park and the beach is just across the road from it.

In terms of land cost, the price tag of $744 million translates into $1,224.57 psf per plot ratio (psf ppr).

Assuming a construction cost of $300 psf, plus professional fees, interest cost and other costs at $150 psf, the break-even cost of the development is estimated at $1,674 psf.

A developer will therefore be able to sell the units in the new development at $2,000 psf, says the chairman of the sales committee at Amber Park, who only wants to be known as Mr Lim.

“And that is assuming a developer wants to sell the units on a freehold basis.

Some plots in the Amber area that are freehold were launched for sale on a 99-year leasehold basis, so the selling price [of the new units] is 15% to 20% lower.”

The most recent collective sale in the Amber Road-Amber Gardens neighbourhood was Amber Towers, which was sold to a joint venture between China Sonangol and OKP Holdings in 2011 for $161.6 million, or $1,118 psf ppr.

The new project called Amber Skye was soft-launched sometime in 2H2014 and officially launched a few months ago.

As end-April, 18 out of a total of 109 units in Amber Skye had been sold.

Positioned as a high-end condo tower, the project is designed by Italian architect Massimo Mercurio.

Purchases so far tended to be two-bedroom units of 990 to 1,119 sq ft, at prices ranging from $1,650 to $1,981 psf, according to caveats lodged.

The latest transaction was in April, for a 990 sq ft unit that fetched $1.76 million ($1,777 psf).

Despite lacklustre sales at some of the recent prime condo launches, Lim is confident Amber Park will be able to find a buyer.

“There’s never a good or bad time to launch,” he says.

“ Although the market is quite depressed, we’re selling land for development in five to six years’ time, so we’re selling into the future.

By then, some of the property cooling measures would have been lifted.” Lim thinks the asking price of $1,224.57 psf ppr is “not exorbitant”.

It is “quite reasonable”, he says.

The recent collective sale process started 1½ years ago, and the 80% consensus was obtained sometime this year.

“This is our third attempt,” he adds.

Two previous attempts The first collective sale attempt was sometime in early 2009, shortly after the collapse of Lehman Brothers and the onset of the glo bal financial crisis.

It attracted only one expression of interest, and no firm offer.

The second attempt in 2011 did not take off because the sales committee was short of one unit to reach the 80% consensus.

“In terms of share value, it was well over 80%, but in terms of strata area, we were at 79.6%, so we were unlucky then,” recounts Lim, who was on the last sales committee.

He considers himself a “pioneer” in Amber Park, having moved into the development 29 years ago, when the project was first completed.

One of the attractions of Amber Park is that some of the units on the high floors and penthouses enjoy unblocked sea views.

A new development could be built with an orientation such that more units can enjoy the sea views, French says.

Currently, slightly more than 100 units (over 50%) at Amber Park are tenanted.

“A lot of the [tenanted] units are owned by investors from Australia, Indonesia, Canada and Malaysia,” says French.

“Some of the owners want to have first right of choice in buying a unit when the new project is launched.” According to French, many of the residents of units at Amber Park “are getting old”.

“They have lived there for many years and their children have moved out, leaving just the aged couples and maids,” he adds.

“Most of them would prefer to downsize at this stage in their lives.” If the collective sale is successful, and the reserve price of $744 million is achieved, owners of the typical 1,744 sq ft units at Amber Park will get to pocket $3.6 million each, while penthouse owners will walk away with about $6.6 million.

“This is a prime address,” says French.

“After selling out, some owners may choose to rent a unit for a few years, and book one at the new condo.

When the project is completed, they can move back in.”

The Amber Park collective sale will close on July 16.

This article appeared in the City & Country of Issue 678 (May 25) of The Edge Singapore.

Tags:

Follow our channels to receive property news updates 24/7 round the clock.

Subscribe to our newsletter