Why did Wing Tai pull out of the Holland Tower en bloc deal

Holland Tower, a 14-storey apartment block in Singapore’s District 10, has been at the centre of a failed collective sale. The $76.3 million deal, which Wing Tai Holdings announced on March 15, was recently rescinded due to non-fulfilment of certain conditions. The Singapore-listed property developer declined to comment further when contacted.

Situated in a prime location within the Holland Park Good Class Bungalow (GCB) Area, the 21,878 sq ft, freehold elevated site was given a “special waiver” for apartment redevelopment but subject to stringent setback constraints. The built-up area of 43,691 sq ft is in line with its existing gross plot ratio of 2.0.

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Wing Tai had intended to leverage its superior location attributes to develop a luxurious and iconic residential project. However, the restrictive development controls and site conditions may have presented difficulties in achieving its plans.

A $76.3 million land rate, translating to $1,764 psf per plot ratio, was agreed upon between Wing Tai and the owners of Holland Tower. Assuming a typical redevelopment site, a breakeven cost is estimated to be in the range of $2,800 to $2,900 psf, with an average selling price of the new project in the range of $3,200 to $3,300 psf.

The collective sale market is already in the doldrums and this latest episode is likely to add further gloom. With the government’s cooling measures, such as additional buyer’s stamp duties (ABSD) imposed on non-landed residential properties purchased by foreigners, transactions have already declined significantly.

SRI Capital Market, the exclusive marketing agent for Holland Tower, declined to comment for this story. CTLC Law Corporation was the appointed lawyer for the owners of Holland Tower.

Wealthy foreign buyers and Permanent Residents (PRs) tend to gravitate towards such condominiums in the Core Central Region (CCR). Despite this, developers have reacted to the cooling measures by postponing the launch of their luxury developments in the CCR. Some developers, like Hong Kong-listed Shun Tak Holdings, have even backed out of their en bloc purchase following the introduction of cooling measures.

Given that Wing Tai may have already paid the 5% down payment of $3.815 to the owners of Holland Tower, it will now have to fully refund the deposit back.