Holland Hill Lodge owners’ bullish bet

The strong response to Allgreen Properties’ private preview of Holland Residences at the corner of Taman Warna and Holland Road last week has created a buzz among owners of apartments at Holland Hill Lodge at the corner of Queensway and Holland Hill.

Last week, the owners of the 11 units at the development collectively put up their three-storey apartment block for sale by tender, with an indicative price of S$15 million to S$16 million. Based on the land area of 9,903 sq ft and a plot ratio of 1.6 under the URA 2008 Masterplan, the price translates into S$1,038 to S$1,107 psf per plot ratio, says Credo Real Estate, the marketing agent for the project.

Given that 100% of the owners have agreed to the en-bloc sale, “we don’t need the Strata Titles’ Board [STB] approval”, says Alvin Chua, one of the apartment owners at Holland Hill Lodge. “Once the option is signed, the sale can be completed in three months. It’s a hassle-free transaction,” he adds. “What’s more, there is no other site on the market of this bite size within 1km of this area.”

Credo Real Estate’s executive director Yong Choon Fah agrees. The quantum price is not only palatable to most contractors and private investors-cum-developers but is also attracting interest from some of the listed boutique developers, given its prime location and freehold status.

Developers or investors can also retain the existing building since it’s still in good condition even though it was built 12 years ago. The building can be refurbished and the units reconfigured for conversion into corporate residences or serviced apartments, subject to approval by the relevant authorities, says Yong. If an investor pays S$15 million, he would effectively be paying S$1,158 psf for the existing strata area of 12,949 sq ft, she estimates. “This is 20% to 28% lower than the average selling price of S$1,450 and S$1,600 psf achieved at Lush on Holland Hill and Parvis, respectively.”

Alternatively, the site can be redeveloped into a brand-new 12-storey block with 22 units averaging 620 sq ft. “There aren’t that many small units available for sale in this area,” notes apartment owner Chua. “Even the smallest unit at Parvis starts at 990 sq ft.”

Chua, a 32-year-old banker and property investor, was one of the earliest buyers on the first day of private previews at the 248-unit Parvis on Holland Hill last November. He purchased a three-bedroom apartment for S$1,500 psf, he says. The high-end condo is jointly developed by Ho Bee Group and MCL Land and just a short walk up from Holland Hill Lodge.

To date, 85% of the units at Parvis have been sold and prices have been adjusted upwards by 2% to 3%. Smaller units are fetching around S$1,700 psf, while larger ones are priced at about S$1,600 psf. Only two of the 51 two-bedroom units and five of the 76 four-bedroom apartments are still available.

Next door to Parvis is listed construction and engineering firm BBR Holdings’ Lush on Holland Hill. Around half of the 56 units in the project have been sold, at an average price of S$1,450 psf. The unit sizes are also large, with the smallest being a two-bedroom apartment of 1,218 sq ft.

Hence, Credo’s Yong believes there is demand for one-bedroom apartments in the vicinity, given the proximity of the area to the future MRT station on Farrer Road. The strong sales seen at Holland Residences, where all the one- and two-bedroom apartments were snapped up in a matter of days, shows the popularity of one-bedroom units in the Holland area, she observes.

Even in Holland Hill Lodge, there are only two units of 538 sq ft, says Chua. He bought his unit in early 2007 and currently lives in it, although he had wanted to buy it as an investment. Prior to that, he lived in the 67-unit Olina Lodge, also on Holland Hill.

Another owner of a unit at Holland Hill Lodge is James Peh, who owns a freight forwarding business. He purchased his apartment in mid-2007 as an investment. “I bought it because I was staying in this area and I had just sold something else and didn’t want to miss out on the opportunity,” he admits. “It’s also the draw of this area.

Once you have lived here, you will always want to stay in this neighbourhood.”

Peh’s bet was that with only 11 owners, it would be easier to facilitate an en-bloc sale. Most en-bloc sales committee members have been spooked by events at Horizon Towers, where as recently as last week, minority shareholders were still reportedly suing some of the members of the original sales committee. “Our case is different,” says Peh. “All 11 owners have agreed to the sale, so we are able to bring it to market quickly and the market is hot.”

This is not the first time that the property has been put up for en-bloc sale. The last attempt was in October 2007, with the indicative price then also in the S$15 million to S$16 million range. “Our timing was bad,” recalls Chua. “At the time when our tender closed, it was the start of the global financial crisis and everyone was sitting on the fence.”

But, the owners are hoping that they will be second time lucky. The most recent transaction at Holland Hill Lodge was for the largest unit, a 2,185 sq ft apartment, which sold for S$1.36 million, or S$622 psf, according to a caveat lodged with URA Realis. In 2007, during the last property boom and collective-sale fever, units in the project had changed hands at prices ranging from S$702 to S$799 psf, with one unit sold for a high of S$975 psf.

If the sale goes through, based on the indicative price, the owners stand to see a 50% to 60% premium above the existing market value, estimates Yong. Some property consultants suggest that the asking price is “a little aggressive”, based on current transaction prices.

But, Peh reckons that for boutique developers, the quantum amount is appealing. He is optimistic that “it could be 100% sold in a matter of days, like Alexis on Alexandra Road”. The tender for Holland Hill Lodge closes on Feb 25.