Source : Sunday Times - 5 Apr 2009
In January 2007, a buyer was finally found for Horizon Towers in what seemed like a pretty good deal.
Unit owners were told, when they signed the collective sale agreement, that the reserve price of $500million would give them 80 per cent more for their apartments than if they were to sell them individually. At the time, the price would also make Horizon Towers the biggest collective sale in Singapore’s history.
In any case, it looked as though the estate’s owners did not have many options. The first four bids for the estate had all come in below the reserve price and the bidders refused to pay any more.
So when a consortium led by tycoon Ong Beng Seng’s Hotel Properties agreed to pay $500 million, the sale committee rushed to seal the deal.
But even as the ink was drying on the collective sale agreement, the reserve price was losing its lustre as the property market emerged from its long slumber and roared back to life. With the values of individual units suddenly soaring, the collective sale premiums that had been promised to the owners started to disappear.
The committee was aware of this but decided not to go back and consult the owners as that would delay the sale, the Court of Appeal found. It also did not actively pursue another higher offer of
$510 million that had been made by a Hong Kong firm, Vineyard Holdings.
The Horizon deal started to look more and more unattractive to the sellers, especially when they realised that property prices were rising so quickly that a replacement home would cost much more than their collective sale gains.
Now that the sale has been scrapped for good, it is likely that these majority owners-turned-minority supporters have mixed feelings. While they get to keep their homes, they have missed out on the whole property boom.
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