Leonie Gardens has recently joined the growing list of luxury condominium developments trying to sell en bloc. Huttons Asia announced to property news outlets that Leonie Gardens is relaunching a collective sale for a second time at the same guide price of $800 million. For property investors looking to bid, the tender is reported to close on January 22, 2019.
Leonie Gardens is a 99-year leasehold residential development built by CapitaLand in 1993. Its developer is one of Asia’s most reputable real estate firms, with a diverse portfolio of residential and retail developments in over 30 countries. Leonie Gardens comprises 128 units across 22-storeys, with units sized from 1,733 sq ft to 2,248 sq ft.
The condominium development is located at Leonie Hill in prime District 9. Situated in a prime residential area, it’s only a three-minute walk from the Orchard Road Shopping belt and only a 10-minute walk from the Orchard MRT station.
It was first launched en bloc in the property market in May of 2018, but the tender was unfortunately closed without a bid just a month later after the collective sale was announced.
The $800 million reserve price translates to $2,104 psf based on Leonie Garden’s gross floor area (GFA) of 410,431.80 sq ft and a total strata area of 324,972.90 sq ft. But if a 10% balcony space is included, this translates to a lower $2,021 sq ft per plot ratio (psf ppr), subject to approval.
Under the 2014 Master Plan, the site has a plot ratio of 2.8 under. While there is no payable development charge since the baseline (2.8152) is above the condominium’s plot ratio. However, if the extra balcony space is included, the property investor will need to pay over $44 million of the development charge.
There is also a differential premium of $63 million that needs to be paid by the property investor. This is meant to top-up the site’s leasehold tenure to a full 99 years. Currently, Leonie Gardens has 71 years left in its leasehold term.
The buyer may also redevelop Leonie Gardens into a new condominium of about 380 units with an average floor size of 1,076 sq ft. It can also be alternatively developed into a condominium with 544 units sized at an average of 753 sq ft in space.
According to Mr. Vijay Chopra, the chairman of the condominium’s collective sale committee, they held off the relaunching of the en bloc sale until December due to the July 6 cooling measures that resulted in a lack of interest from buyers. However, he optimistically notes that “since then, developers have had enough time to see how the new condo launches fared and how prices are holding up.”
When asked why Leonie Gardens was relaunched at the same guide price of $800 million, he felt that the committee didn’t want to take the risk of lowering the reserve price when they weren’t sure up to how much property investors were willing to pay. “The owners are willing to accept a cheaper price, but we are not sure what that price should be,” he added.
Considering the current real estate market, property investors have much to choose from, as many other luxury condominium developments have recently been trying to put up for a collective sale. This includes Horizon Towers, a 211-unit, 99-year leasehold residential project that relaunched its collective sale at a higher guide price of $1.1 billion. Like Leonie Gardens, it also attempted to go on sale en bloc in July of last year. However, the sale was closed without any property investor bidding on it. Its new round of collective sales will close on January 28, 2018.
Other luxury condominium developments in District 9 that were put up for an en bloc sale include Elizabeth Tower in Mount Elizabeth and The Regalia in River Valley. However, there were also no bids, and their respective sales were promptly closed.
Mr. Vijay believes that even if there were still no takers for Leonie Gardens’ current round of en bloc sale, their committee still has time for a private treaty. The condominium is situated at a prime real estate location, so he is confident that many buyers can still see it as a high-value property investment. In addition, Leonie Gardens is located at the highest point in the Orchard area, and it’s close to many of Singapore’s landmarks, including Great World City. “Leonie Gardens is ideal for any developer who wants a property in the prime district,” he noted.