Privatise Neptune Court? Pay $144m

Source : The Sunday Times, Dec 2, 2007

Finance Ministry’s estimated quote may dash hopes of unit owners hoping to seal en bloc deal.

RESIDENTS at Neptune Court may have to bury their dreams of reaping a windfall of up to $2.4 million each from a collective sale.

The Ministry of Finance, which owns the land the estate sits on, has estimated that the cost of privatising it is $144 million.

That means the 752 apartment owners at the leafy Marine Parade estate with sweeping sea views will have to fork out about $191,000 each.

But residents of HUDC estates need pay only $25,000 to $30,000 to the HDB to privatise their estates.

The huge difference has prompted many residents to ask how the ministry came up with the $144 million sum.

One resident in his 70s, who declined to be named, said: ‘I don’t know why the ministry has to sell the land at such an expensive price when HDB can do it for so much less.’

The ministry said its estimate was derived by comparing ‘the capitalised value of the annual net rents at Neptune Court with those of a comparable private condominium’.

This means it took into account the enhanced value of the privatised Neptune Court, said Credo managing director Karamjit Singh.

‘There are various valuation principles which can be adopted by the valuer. (Those) adopted by the ministry and HDB seem to be different,’ he added.

When HUDC estates are privatised, residents pay mostly for the cost of common areas such as the carpark and landscape.

The Sunday Times understands that HUDC estates and Neptune Court were sold under different schemes, and comparisons could be unfair.

Neptune Court is on a site of about 780,000 sq ft, about three times the size of Chancery Court, a privatised HUDC estate in Dunearn Road.

The huge ministry estimate has come as a blow for Neptune Court residents who were keen on selling.

A retired civil servant in his 60s told The Sunday Times: ‘I’m a pensioner, I don’t have that much money!’

Retired civil servant Michael Chia, 67, has the $191,000 but is in a dilemma: ‘I’m afraid if I pay for the privatisation, the en bloc will not go through. On the other hand, I’m also afraid the Government will one day claim our estate and give me a replacement flat elsewhere.’

But others are relieved.

A 74-year-old housewife, who has been living at Neptune Court for more than 35 years, said: ‘I was so happy when I heard the ministry is asking for so much money. Maybe now, most residents will no longer want to privatise and go for an en bloc.’