UOL likely to turn Raintree Gardens into a 600-750 unit condo project

Here's why it's an attractive site with a decent price.

Right off the bat from its GBP229.6m acquisition of 120 Holborn in London UK, UOL announced that it has, through a JV with United Industrial Corporation Ltd (UIC), successfully acquired the Raintree Gardens residential development at Potong Pasir Ave 1 for S$334.2m through an enbloc tender.

OCBC Investment Research believes that the site will be potentially redeveloped into 600-750 unit condo.

The sale price, it said, translates to about S$797 psf per plot ratio on the potential gross floor area, including an estimated differential premium to top up the lease to a fresh 99 years and for redevelopment of the site to a gross plot ratio of 2.8.

"We believe this is a decent price for an attractive riverfacing site near the up-and-coming Bidadari area and are positive that the group has successfully replenished their land-bank in a competitive environment," commented OCBC Investment Research.

Management has announced that the acquisition would be financed principally from bank borrowings and internal resources.

The completion of the en-bloc acquisition is further subject to several conditions being met, including an order of sale by the Strata Titles Board or High Court.

More than 80% of the owners in the 175-unit estate have given consent to the sale and the purchase price works out to be about S$1.9m per unit.

The riverfronting site attracted significant interest from developers and received between five and ten bids, and the final price was about 6% above the S$315m reserve price.

Raintree Gardens is a privatized Housing and Urban Development Company (HUDC) estate built in the 1980s and comprises two 12-storey maisonette blocks and a seven-storey maisonette block.

The 99-year leasehold site is zoned for residential use and has an area of 18.7k sqm with a plot ratio of 2.8.

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