An undisclosed local consortium has snapped up Geylang’s Advance Apartments for $26.5 million via private treaty, making this the fourth condo to undergo an en bloc sale in 2020. This is the freehold condo’s second attempt at a collective sale, according to The Business Times.
The sale amount is the same guide price quoted by marketing agent JLL when the condo was first put up for sale via tender in September this year. The tender closed in the following month without any bidders, although JLL said the site, which is located along Lorong 25A Geylang and is less than 300 metres from Aljunied MRT station, “attracted many enquiries from small and mid-sized developers and institutions.”
At $26.5 million, the sale price translates to a land rate of about $877 per square foot per plot ratio after factoring in the 7% bonus Gross Floor Area (GFA) for balconies and a development charge of about $3 million. The 11,439 square foot (sq ft) site can be redeveloped into a residential or an institutional development with a maximum of eight storeys, according to the latest URA Master Plan.
Advance Apartments was completed in 1989. If redeveloped into a condo, it is expected that the site can yield up to 34 apartment units with an average size of 900 to 925 sq ft, JLL said.
Each owner to receive about 40% above market value
As a result of the sale, each owner of Advance Apartments will receive gross sale proceeds of between $1.7 million and over $2 million. Units at the condo are in two configurations—1,281 sq ft and 1,701 sq ft— and the last recorded transaction was for a 1,281 sq ft unit that changed hands for $1,080,000 ($893 psf) in October 2011.
Using transactions from neighbouring condos of similar age and tenure, 99.co estimates that the current market value of the 1,281 sq ft unit stands at $1.2 million, which means the the sale proceeds for each unit at Advance Apartments is 40% above market value.
In per square foot terms, the $1,327 psf that an owner will receive from the en bloc sale is even higher what new freehold condos in the vicinity typically fetch. Located right next to Advance Apartments, 980 and a 1,001 sq ft units at The Centren (a freehold condo completed in 2016) are respectively listed at $1,224 and $1,299 psf at the time of writing.
What the owners received is even more astonishing when you consider that The Centren has facilities like a swimming pool and gym, whereas old Geylang condos like Advance Apartments typically have nothing more than a car park.
Within a 100-metre radius, freehold condos of a similar age as Advance Apartments, namely Skt Mansions, Eng Apartments, East 25 Apartments and Excellence Mansions, could stage their own en bloc attempts sooner rather than later. The value of these condos have skyrocketed in the past decade with the development of the Paya Lebar area, and owners might well be tempted to cash out.
In District 14 where Geylang is located, condo transaction activity has improved this year. In the first 11 months of 2020, 1,355 units were transacted, out of which 369 were resale transactions. The number has already exceeded the full-year figures for 2019, when 1,107 units were transacted, out of which 350 were resale.
Aside from Advance Apartments, another old freehold private apartment, Yuen Sing Mansion at Lorong 13 Geylang, was also successfully sold via private treaty in July this year.
The Geylang area has also seen a healthy buyer uptake of new launch condos this year despite the Covid-19 outbreak. New launch condo Arena Residences along Guillemard Road is officially sold out, wherease 36 out of 50 units at Noma have been sold since its August 2020 launch.
Spurred by a property market with buoyant buyer demand, developers continue to be on the lookout for small-scale developments, such as old terraced homes, to replenish their land bank. A lot more owners could be in line for a windfall, if they’re willing to sell.
Will Geylang become an en bloc hotspot in 2021? Let us know in the comments below.
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