GuocoLand-Hong Leong JV snap up Pacific Mansion for $980 mil, second largest collective sale deal in history

Singapore property developers GuocoLand and Hong Leong Holdings are stakeholders in a joint venture company that has paid $980 million for the 290-unit Pacific Mansion at River Valley Close. The development occupies a freehold site of 128,352 sq ft.

The land cost translates to $1,806 psf ppr, based on the maximum allowable gross floor area of 542,544 sq ft, which takes the verified existing gross floor area of 493,222 sq ft and plot ratio of 3.84, and factors in an additional 10% balcony area. There are no development charges due to Pacific Mansion’s high development baseline.

Nicholas Mak, ZACD Group's director, estimates the breakeven price to range between $2,520 psf to $2,600 psf.

Owners of the 288 apartments at Pacific Mansions are expected to walk away with $3.26 million to $3.48 million, while the two shop unit owners are expected to receive $2.2 million to $4.5 million in gross proceeds.

“Pacific Mansion drew strong interest from local and foreign developers,” comments Galven Tan, CBRE’s director of capital markets, who brokered the sale. “It is testament to the attributes of the sprawling freehold site in the heart of District 9, in proximity to the Orchard Road shopping belt and the upcoming Great World MRT station,” adds Tan.

GuocoLand holds a 40% stake in the JV, while Intrepid Investments and Hong Realty, subsidiaries of Hong Leong Holdings, hold a 40% and 20% stake respectively.

Across the road from Pacific Mansion is the 450-unit Martin Modern. GuocoLand bought the Martin Place site in a Government Land Sales (GLS) tender for $595 million, or $1,239 psf per plot ratio. This set a record for the highest psf price achieved by a private residential site in a state tender before it was surpassed by the $1,733 psf ppr winning bid Frasers Property made for the Jiak Kim Street site last December.

The collective sale of Pacific Mansion is the second largest on record in terms of absolute price, only falling short of the $1.338 billion sale of Farrer Court (which was redeveloped into d’Leedon by CapitaLand) in 2007, according to CBRE's Tan.

The next largest deal in the current collective sale cycle (which began in 2016) is Tampines Court, which Sim Lian Group bought for $970 million, followed by Amber Park, which CDL bought at $907 million.

In the last collective sale cycle of 2005 to 2007, GuocoLand purchased the freehold Leedon Heights – located across the road from Farrer Court in prime district 10 – for $835 million, which has since been redeveloped into the 381-unit Leedon Residence.