OUE Expected To Take Up Option To Buy The Grangeford

Source : The Business Times, Fri, August 3, 2007

OVERSEAS Union Enterprise is expected to exercise a put-and-call option signed in June to buy The Grangeford, after lawyers confirmed that owners controlling at least 80 per cent of share values have agreed to sell the Grange Road property.

CB Richard Ellis executive director Jeremy Lake said OUE's unit land price remains at $1,810 per square foot per plot ratio, including $92.7 million payable to the state to top up the 130,982 sq ft site's lease to the original term of 99 years.

However, OUE will be now paying Grangeford's owners $625 million instead of the $592 million agreed in June. The higher price comes after the Urban Redevelopment Authority said Grangeford's existing gross floor area (GFA) is equivalent to a 3.027 plot ratio - instead of the 2.87 based on an architect's calculations earlier.

The new development on the site will be allowed to retain the existing equivalent plot ratio of 3.027, and OUE has signed a supplementary agreement to top up its bid to $625 million to reflect this. No development charge is payable for the site.

The option in June was subject to the collective sale being approved by owners controlling at least 80 per cent of share values.

'The last few signatures were obtained a few days ago but we were waiting for confirmation from the lawyers that the signatures were in order. We received this confirmation on Wednesday night,' Mr Lake said.

The option can also be exercised by the vendors, triggering the sale to OUE. Both sides now have up to Aug 15 to exercise the option.

With the Grangeford deal now set to go ahead, its unit land price of $1,810 psf ppr will be used as a benchmark in negotiations for other prime collective-sale sites, market watchers reckon.

Grangeford's $1,810 psf ppr is the highest price paid for a 99-year leasehold residential site in Singapore, surpassing the $1,104 psf ppr paid by a Wing Tai unit in June 1997 for a site in Draycott Park, which it has since developed into the Draycott 8 condo.

For a freehold site, the current benchmark, set in June, is SC Global's acquisition of The Ardmore for $2,337 psf ppr.