The collective sale of Shunfu Ville has finally received the green light, after the Court of Appeal dismissed the appeal lodged by objectors, reported the Straits Times.
The $638 million sale of the privatised HUDC estate made headlines last May when more than 82 percent of the owners consented to sell the 358-unit estate to Qingjian Realty.
Last July, the deal faced a major hurdle when some of the owners objected to the sale. They later filed an appeal to the High Court, with one objection asking whether the transaction was made in good faith, considering the sale price.
The sale committee at Shunfu Ville had launched two public tenders from 2015. With a reserve price of $688 million, both tenders failed to attract bids. Nonetheless, the committee had been in discussion with Qingjian, which offered $638 million.
With this, the committee secured the requisite 80 percent consent for the $638 million sale of the estate. Due to the urgency of the timeline, it did not call for another tender at the said price.
In ruling in favour of the sale, the Court of Appeal said while the “committee was in somewhat of a rush, there was nothing to suggest an absence of good faith or impropriety in the transaction”.
It noted that the committee entered into a private treaty with the property developer as “failing to commit to Qingjian not only did not assure that a better offer would come along” but could have also resulted in “the loss of Qingjian’s offer”.
The conclusion of the sale will see each flat owner at Shunfu Ville receiving $1.782 million on average. It is understood that the sale is set to be completed in July, with the owners to move out six months from then.
Acting for Qingjian, Lee Liat Yeang, Senior Partner at Dentons Rodyk & Davidson, said the decision was not only significant in clarifying the law in this area, but also gives greater confidence to property developers looking to acquire land via en bloc sales.
Pleased that the deal went through, Li Jun, Managing Director of Qingjian Realty, said the firm, which plans to build 1,000 homes on the Shunfu Ville site, now faces higher development charges of around $50 million – affecting its profit margins.
Featuring a mix of landed units and high-rise units of up to 25 storeys, the project will be launched one year from now, he noted.