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25 June 2013

Thomson View en bloc sale: Hearing starts

Objectors claim some residents were paid to consent to $590 million collective sale

Source: Straits Times | Money 
By Melissa Tan

THE huge $590 million collective sale of Thomson View Condominium finally went to court for approval yesterday, after hitting a legal snag earlier this year.

The en bloc sale needs the High Court's approval in order to proceed after some owners filed objections.

Market watchers said the outcome of the case would likely have a significant impact on the en bloc market, which only recently began showing signs of taking off.

The case is seen as important given the size of the sale, which could reach almost $1 billion after factoring in upgrading premiums and development costs.

The tender for the 540,314 sq ft Thomson View site was awarded to mainboard-listed Wee Hur Development and private equity investment firm Lucrum Capital at $712 per sq ft (psf) per plot ratio last September.

The five-day hearing before High Court Justice Andrew Ang began with collective sale committee (CSC) chairman Philomene Ngui taking the stand.

One issue before the court is that CSC's marketing agent HSR paid some owners to consent to the sale.

HSR has been allowed to participate in the case and is represented by Rajah & Tann. In its submission, the firm said the compensation paid to those unit owners came out of its own fee. "HSR lost money, not the objectors, not any of the other owners, and not the CSC," it added.

HSR's head of investment sales Jeffrey Goh is likely to take the witness stand today.

Ms Ngui is one of the representatives appointed by the owners of 215 units in the project who consented to the en bloc sale. They are represented by Wong Tan & Molly Lim.

The objectors - represented by Drew & Napier, Daisy Yeo & Co and Kelvin Chia Partnership - are arguing that the sale should not be approved as it was not made "in good faith".

One bone of contention is the claim that the sale price of $590 million was too low in light of a government announcement in August last year that an MRT station along the Thomson Line would be built nearby.

Wee Hur and Lucrum said earlier this month that they would give the consenting owners of Thomson View a deadline extension of six more months, until December, to obtain the sale approval. The original deadline was June 4 this year.

Retail rents in Orchard area, suburbs stabilise after Q1 dip

Source: Straits Times | Money 
By Chia Yan Min

RENTS for prime retail space in Orchard Road and Scotts Road, and the suburban areas, remained constant over the past three months, after dipping marginally in the previous quarter, said property services firm DTZ yesterday.

Rental values in Orchard Road and Scotts Road have come to a standstill from April to June compared with the first quarter of the year, after declining 0.3 per cent in the previous quarter.

Similarly, in the suburban areas, prime retail rents fell 0.2 per cent in the first quarter of the year, but stabilised in the second quarter.

Meanwhile, rental values of prime retail space in the other city areas continued to fall for a third consecutive quarter, dipping by a marginal 0.3 per cent in the second quarter.

This might be a good opportunity for retailers to secure prime retail space in the Marina Centre area, said Ms Anna Lee, DTZ's director of retail.

"The Marina Centre area is slowly transforming with the renovation works at Suntec City Mall and Marina Square. These developments have attracted strong anchor tenants which will be able to draw more shoppers. This may be an opportune time for tenants to start securing prime retail space now as rents may start to pick up with shoppers returning to this area."

Retail rents in Orchard Road and Scotts Road may fall marginally in the second half of the year, due to supply-side pressures from the completion of new developments, added DTZ.

Both the 172,000 sq ft mall Orchardgateway and renovation works at Shaw Centre are expected to be completed later this year.

Other retail developments expected to be completed in the second half of the year include Westgate, Bedok Mall and Aperia.

Meanwhile, resale price growth of prime retail space in all regions was weaker in the second quarter.

The average capital value of prime resale retail units in Orchard Road and Scotts Road and the suburban areas rose 2.6 per cent and 2.5 per cent respectively in the second quarter, after gaining 5.8 per cent and 7.7 per cent respectively in the first quarter.