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Mandarin Gardens' S$2.9 billion en-bloc bid falls through

SINGAPORE — Mandarin Gardens has failed in its en-bloc attempt, just over a month after owners raised their asking price to a record high S$2.93 billion.

Mandarin Gardens failed to get the 80 per cent consensus among owners needed to proceed with its en-bloc attempt, weeks after owners raised their asking price to a record high of S$2.93 billion.

Mandarin Gardens failed to get the 80 per cent consensus among owners needed to proceed with its en-bloc attempt, weeks after owners raised their asking price to a record high of S$2.93 billion.

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SINGAPORE — Mandarin Gardens has failed in its en-bloc attempt, just over a month after owners raised their asking price to a record high S$2.93 billion.

The development was unable to obtain an 80 per cent consensus among its residents to put the land up for collective sale as of Sunday (March 24), when its collective sales agreement expired.

By Sunday, only 68.34 per cent of owners had signed the agreement, said Mr Vincent Teo, the chairman of the condominium’s Collective Sales Committee, in a letter to unit owners seen by TODAY.

“We have learned valuable lessons which will certainly be very helpful in our next journey,” said Mr Teo, noting that a similar en bloc attempt in 2008 fell through in the midst of the global financial crisis. 

“The general feeling is that the current market sentiment for en bloc sales is heading south, as evidenced by the non-bidders in the tender process of several large estates.”

The 1,006-unit condo had first increased its asking price from S$2.48 billion to S$2.79 billion in November last year, after discovering that the land was undervalued by over S$300 million.

Then on Feb 21, the sales committee raised the asking price further, to S$2.93 billion, the highest ever set in a collective sale attempt. This was after “receiving feedback” from both signed and unsigned owners, said the committee.  

WHAT EXPERTS SAY

Property experts TODAY spoke to said that it was “not unexpected” that some residents were not willing to sign the agreement.

This en bloc attempt was an “uphill task”, said SLP International Property Consultants executive director Nicholas Mak.

“It’s a very big development with many units. It would have been a huge challenge to get the owners to agree to sell as they may not be keen to move,” Mr Mak said.

He noted that that several other recent en bloc attempts have been unable to reach 80 per cent consensus too.

“It’s common to get stuck at 60, or a low 70 per cent. Because once 75 per cent is reached, the pro en bloc camp will try their hardest to push it up to 80. But if they don’t even reach 70 per cent, they might find it hard to continue pushing for it,” he said.

International Property Advisor chief executive Ku Swee Yong said he had predicted from early on that Mandarin Garden’s en bloc attempt would be “futile”.

“Developers would not take such a big risk of over a billion dollars, and after the cooling measures in July, banks are unlikely to support developers with loans for such big projects,” he said.

In July last year, regulators raised the Additional Buyer’s Stamp Duty that developers would have to pay if they do not build and sell all of their newly developed units within five years of obtaining a parcel of land.

This has made the collective sale of larger projects less attractive to developers, Mr Ku noted.

“Before the cooling measures and the increase from S$2.48 billion, I already said (the Mandarin Gardens en bloc) was not possible. After the cooling measures kicked in, I said the en bloc was dead, and yet they increased (the asking price),” he added.

“Banks won’t support such a large quantum of borrowing for that location.”

Mr Chris Koh, the director of property consultancy Chris International, said that Mandarin Garden’s failed attempt was reflective of “the residents’ lack of intent to sell at the moment”.

“Some residents may feel that they don’t need the money. And there is also the possibility that they may not be able to get another property of a similar or better value.”

Still, Mr Koh said it “may be possible” for a future collective sale of Mandarin Gardens to succeed.

“As the condo ages, maintenance will become more onerous for both the condo itself and individual units, and maybe then residents might be more motivated to sell.”

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