Singapore-listed TEE Land announced on Jul 26 that it has decided not to exercise its option to purchase Teck Guan Ville at 338 to 364 Upper East Coast. In its announcement TEE Land said that its decision to abort the deal was made “after taking into account the impact on market sentiments and purchasers’ interest arising from the latest property cooling measures announced by the authorities on Jul 5.”
The company is willing to forfeit its 1% deposit. A month ago, TEE Land had announced that it was acquiring the freehold site at Upper East Coast Road for $60 million, which translated to a land rate of $1,300 psf per plot ratio. Teck Ville comprises just 14 units, and all the owners had agreed to the sale. Had the deal been successful, the owners would have walked away with $4.285 million each.
Teck Guan Ville is a freehold site with just 14 units (Credit: ERA)
The day before (Jul 25), TEE Land had reported a loss after tax of $4.9 million for FY2018 (ended May 31), compared to a profit of $3.3 million in FY2017. The loss for was partly attributed to “one-off non-cash items” of $10.6 million: An impairment loss of $1.7 million for the completed condominium, The Peak at Cairnhill I; another $6.9 million for the disposal of its stake in Chewathai Public Co. Ltd; and $1.5 million fair value loss on investment properties relating to TEE Building and Workotel in New Zealand.
In backing out from the purchase of Teck Guan Ville on Jul 26, TEE Land added that it has “decided to adopt a more prudent and circumspect approach towards new projects, pending clarity on the industry outlook”.
This marks the first, but perhaps not the last en bloc deal to be stymied by the latest property cooling measures.