Still Home For 8 More Months

En bloc firm offers Leedon Heights residents leaseback deal

RESIDENTS of Leedon Heights came home to a pleasant surprise last week — the chance to stay on in their apartments until the end of January next year, instead of having to move out by June.

Following appeals from residents and home-owners, the buyer of the en bloc site, GuocoLand, extended a leaseback deal to them.

In a notice dated April 10, the company offered a short-term lease, subject to a minimum of three months, up until Jan 31, 2009.

The 48,525-sq-m, 23-year-old condominium off Holland Road and Farrer Road was to have been vacated by June 2.

But as the showflats for the development will be built off-site — though still on the sprawling land — developer Rivaldo Investments, a Guocoland subsidiary, agreed to the lease arrangement.

Leedon Heights made news last April when GuocoLand paid $835 million — a record price then — for the site.

Following Channel NewsAsia's report in January that Guocoland was considering a leaseback deal, many residents apparently responded positively.

One of them who affirmed his interest was retail banking consultant Richard Hartung, who has been living at Leedon Heights since 1994.

But last month, he said, he got a letter from the developer saying that the offer would not be made.

On the latest good news, Mr Hartung said: "We would have loved to stay longer but we have already made new housing arrangements."

Although unusual, leaseback deals are not unheard of.

Property analysts whom Today spoke to said the current slowdown in the property market is allowing developers to kick back their heels and bide time on their next hot project.

Said Mr Colin Tan, Chesterton's head of research and consultancy: "Developers may feel their developments can fetch better prices if they ride out the current cycle. Because they are in no hurry, they may offer a lease back to residents and collect rent at the same time."

Knight Frank's director of consultancy and research Nicholas Mak cautioned that in the offering of such a scheme, there had to be a substantial number of residents interested in renting, as the cost of maintaining the property is high.

Even so, developers would have much to gain in the future with the offering of such goodwill.

"The former owners of these units could be future buyers of the developer's new project or of their inventory stock," said Mr Mak.