SINGAPORE - Chuan Park’s $890 million collective sale - one of the biggest residential en bloc deals for this current cycle - will move ahead after the High Court ruled that the sale is in good faith.
Friday’s ruling comes ahead of the July 5, 2023 contractual deadline under the sale and purchase agreement for the majority consenting owners of Chuan Park to obtain the order for sale for the deal to move ahead.
Justice Kwek Mean Luck, in a judgment issued Friday, said he found that as of July 5 last year, 342 units with a total share value of 1,409 shares (80.93 per cent) and total strata area (80.11 per cent) had consented to the collective sale of Chuan Park at $890 million.
The 80 per cent requirement set out in s 84A(1)(b) of the Land Titles (Strata) Act has been met, the judge said.
Justice Kwek also ruled that “the defendants have failed to provide any credible evidence to show that the (collective sale committee) did not act in good faith in arriving at the sale price of $890 million.”
Chuan Park’s collective sale committee (CSC), which represents the majority owners, applied to High Court to seek approval for the sale after the the Strata Titles Board in December 2022 issued a stop order following three rounds of mediation which failed and after a group of six minority owners did not withdraw their objections to the transaction, according to The Business Times.
The dissenting owners had filed their objections to the Board, alleging that Chuan Park’s CSC and marketing agent ERA Realty failed to disclose material facts relating to a higher development baseline for the condominium – which translates into a “deep discount” for the buyers – among other issues, according to BT.
The 99-year leasehold condo was sold on July 5, 2022 to buyers related to developers Kingsford Group and MCC Singapore.
Owners of the 444 homes stand to receive gross proceeds of about S$1.16 million for a 710 sq ft unit, and up to S$2.53 million for a 2,045 sq ft unit. Of the two commercial units, the 474 sq ft one will receive S$1.09 million, and the 1,238 sq ft one, S$2 million.
Mr Norman Ho, senior partner, corporate real estate at Rajah & Tann, said it is “important for the majority sellers to get the order for sale to go ahead by July 5, otherwise the contractual deadline is breached and the developers can walk away from the purchase.“.
“Chuan Park sellers should be celebrating because the en bloc market is going to get more challenging, given that en bloc premiums (the difference between the open market resale price and the en bloc sale price) have shrunk to as low as 30 per cent and the cost of the replacement property is higher,” Mr Ho added.