Property developer GuocoLand is considering allowing former owners of Leedon Heights condominium in District 10 to continue staying on in their units for a limited period of time.
This is a goodwill gesture at the request of some residents of the development who want more time to find replacement units. The 23-year-old Leedon Heights, off Farrer Road, was sold to GuocoLand in a collective sale last year for S$835 million.
Together with a S$40 million development charge, the price works out to S$1,062 per square foot per plot ratio.
Some owners said they had asked for more time to vacate their units while they looked for replacement units.
Karamjit Singh, Credo's managing director, said: "Well, most developers prefer to get on with their demolition construction so as to be able to market their projects. Usually, contractually, owners are allowed up to six months (to vacate their units).
"Recently, what some developers with large projects have done is to build showflats within the large land areas at an obscure corner that allows existing occupants to stay on in the units while the new projects are being marketed."
This appears to be what GuocoLand may do as well. Responding to queries from Channel NewsAsia, GuocoLand said it believes that the land parcel is large enough for it to undertake its marketing initiatives for the new development, without inconveniencing the residents.
As such, it is considering the request to allow Leedon Heights residents to remain in their homes for a limited period.
Leedon Heights sits on a land area of about 48,500 square metres with a plot ratio of 1.6, which can accommodate buildings of up to 12 storeys.
Nicholas Mak, director of Knight Frank, said: "It's very unusual for developers to lease back to their owners, after the collective sale. The reason is because the developers are buying the site only for redevelopment.
"For developers to do that - I think that has happened before, during the Asian financial crises - it would usually mean that the developer feels that the market, the primary sales market, is rather weak and is not ready to support the kind of selling price that they have in mind."
According to the Urban Redevelopment Authority (URA), there were almost 65,400 private residential units in the pipeline last September. Of these, 41,600 are slated to be completed between this year and 2010. - CNA/ir
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