Thomson collective sale back on track after SLA appeal

Source : Straits Times - 30 Sep 2008

THE collective sale of five small estates in Thomson Road is back on track after getting stalled two months ago.

An appeal by buyers Mergui Development has been granted by the Singapore Land Authority (SLA), to reduce the price of a 1,000 sq m section of a road needed for redeveloping the project.

Developer KSH Holdings, the parent company of a firm in the Mergui Development consortium, told the Singapore Exchange yesterday that the SLA had cut the land premium payable from $16.74 million to $8.37 million.

KSH project manager Richard Tham said the SLA’s revised offer was more in line with the price ‘initially expected’. The buyers were caught off guard by the initial $16.74 million land premium, which is believed to have delayed the completion of the $120 million sale.

Owners at the five estates - Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui - were said to be considering walking away with the 10 per cent deposit of $12 million because buyers had failed to complete the sale, despite a two-month deadline extension.

Both sides have since agreed on a deadline extension until November, but this involved paying a further $3 million deposit to the 88 sellers.

The SLA said it had originally priced the land ’similar to that offered by the developer to the existing land owners along Mergui Road’. However, on review, it noted the land had some development constraints and considered the revised price ‘in order to facilitate the development proposal’.

Mergui Development is a joint venture between Bursa-listed IOI Properties unit Multi Wealth Singapore, a local private firm LBH, and KSH unit Kim Seng Heng Realty, which holds 35 per cent.

The strip of land is needed so the five estates near Rangoon and Moulmein roads can be combined and developed into one project. This will give a land area of 74,355 sq ft and a gross floor area of 208,196 sq ft. It will allow a high-rise block with about 140 luxury flats each measuring 1,250 sq ft on average.