En bloc fever making cautious comeback in Singapore

Queen Astrid Gardens near Holland Road and Braddell View estate.ST PHOTOS: ARIFFIN JAMAR, ONG WEE JIN

SINGAPORE – En bloc fever last swept Singapore in 2016 before the 2018 cooling measures effectively doused it, but the heat is building up again, with at least 10 projects launched for sale since the start of the year.

More than 20 other developments, including Golden Mile Complex and Thomson View, have also started the collective sale process, industry players say.

Some have just held their first extraordinary general meeting to form a collective sale committee, some are selecting marketing agents and lawyers, while others are signing sale agreements.

The heightened activity comes after just three small projects were sold collectively last year, including two freehold sites in Geylang.

Yuen Sing Mansion was sold through private treaty for $15.2 million, while Advance Apartment went to an undisclosed local consortium for $26.5 million.

Two adjoining condominiums in Sophia Road – Fairhaven and Sophia Ville – were bought by a developer for $62 million.

The same factors that drove collective sales in 2016 are still evident now – rising optimism in the property market, still-low interest rates, brisk new-home sales and the limited supply of development land.

Some developers could turn to the collective sale market to replenish their land bank given the conservative supply from the Government Land Sales programme and with unsold inventory easing to 26,426 units in the fourth quarter of last year, said Mr Steven Tan, senior director of investment services at Colliers International.

The last cycle started in the second quarter of 2016, when inventory fell to 23,700 units.

But a triple whammy of onerous curbs introduced in 2018, a still uncertain economic outlook in the wake of the pandemic and talk of yet another round of property curbs have made land-hungry developers more wary.

This is evidenced by the cautious kick-off this year with two notably small projects in prime locations that concluded their collective sales below their launch prices.

Surrey Point, a nine-unit freehold estate in Newton, launched at a guide price of $55 million in January, but sold for $47.8 million.

Three freehold properties at 2, 4 and 6 Mount Emily Road went for $18 million, down from a guide price of $24 million last June.

This is a far cry from the 2016 boom, which kicked off with the headline-grabbing $638 million sale of Shunfu Ville in the Bishan-Thomson area and culminated with the eye-watering $980 million paid for freehold Pacific Mansion in River Valley.

Back then, the en bloc frenzy spawned a number of billion-dollar hopefuls such as Braddell View, the largest of Singapore’s 18 former Housing and Urban Development Company estates, which launched at $2.08 billion. There was also the 660-unit Pine Grove in Ulu Pandan at $1.86 billion.

But both tenders lapsed without any bids in 2019 as developers gave mega-sites a miss due to higher land acquisition costs after the cooling measures.

There appears to be a more subdued mood this time around.

Take Cashew Heights in Upper Bukit Timah, which became a “war zone” among owners during the last sale attempt – its third – in 2018 when those keen to sell hoped to rake in $1.88 billion for the 596-unit 999-year condo.

There were strident demands for higher reserve prices, with ugly spats between pro- and anti-sale owners erupting, accompanied by “car-scratching and keyhole glueing” in previous collective sale attempts, noted owner Andy Goh.

Most car owners now have dashcams installed, said Mr Goh, which should reduce any vandalism, but this time, owners quietly obtained support to form a collective sale committee.

“Now the scaremongering tactic is: If you don’t sell, you will lose the opportunity to do so because the economy is not good and a lot of people are unemployed,” he added.

It is unclear if bullish numbers will be seen for the current cycle, given that at least three of the 10 residential and mixed-use projects have launched at reduced reserve prices this year.

Last month, Queen Astrid Gardens, a 16-unit 999-year leasehold condo sitting in the Queen Astrid Park good class bungalow area, relaunched at a reserve price of $123.8 million, down from a $126.8 million guide price last September.

Jansen Mansions, a 12-unit 999-year leasehold condo in Kovan, relaunched at $19.8 million, down from $22 million in 2018.

Fortune Park, a freehold 68-unit block in Tampines Road launched earlier this month at between $115 million and $118 million, down from its previous attempt at $126 million in 2018, according to Colliers International.

Even a large project, Chuan Park in Lorong Chuan, is making a fresh bid to secure an 80 per cent mandate for a collective sale at a lower price of $850 million.

But this may not entice some owners of the 446-unit leasehold condo given that the estate did not secure an 80 per cent mandate for its 2018 sale bid, even with a guide price of $900 million.

5 projects granted extensions to collective sale deadlines

The High Street Centre in North Bridge Road is back on the market after the pandemic upended its collective sale ambitions, but it has slashed its $800 million asking price by $100 million.

The mixed-use tower at 1 North Bridge Road is among five sites that have been granted extensions to their sale deadlines under the Covid-19 (Temporary Measures) (Temporary Measures for Conduct of Collective Sale of Property) order that took effect on Oct 6 last year.

High Street Centre had garnered the requisite 80 per cent consensus in November 2019 and was in the midst of its $800 million collective sale when the Covid-19 outbreak hit in January last year. ST PHOTO: ARIFFIN JAMAR

Seven applications for the extensions had been lodged with the Ministry of Law as at March 12 with two still being processed, a spokesman told The Sunday Times.

Collective sale committees that were formed before March 25 last year and projects whose sales processes were “disrupted by the circuit breaker and other restrictions that resulted in the inability to hold meetings or garner signings can apply to have their en-bloc process extended for six months from the date of approval by MinLaw”, said Ms Christina Sim, director of capital markets at Cushman & Wakefield.

Three buildings being marketed by Cushman that all began their collective sale exercise between mid-2019 and early last year – High Street Centre, Sixth Avenue Centre and Goldhill Shopping Centre – have been given extensions until Aug 10 this year. “This means that we can start collecting signatures again even if our exercise may have already expired,” Ms Sim said.

Sixth Avenue Centre started its collective sale in the middle of March last year. PHOTO: ST FILE

The 50-year-old High Street Centre had garnered the requisite 80 per cent consensus in November 2019 and was in the midst of its $800 million collective sale when the coronavirus outbreak hit in January last year.

Ms Sim said Sixth Avenue Centre started its collective sale in the middle of March last year.

“We had just passed the necessary resolutions and were collecting the 80 per cent consensus when the lockdown was imposed in April. Likewise, Goldhill Shopping Centre started in January 2020, and was also disrupted.”

Goldhill Shopping Centre has been given an extension until Aug 10 this year. PHOTO: CUSHMAN & WAKEFIELD

High Street Centre’s asking price was reduced as the $800 million tag attracted no bids, she said, adding: “The reserve price for Goldhill remains unchanged at $408 million but Sixth Avenue’s asking price was raised to $85 million from $80 million.”

Managing expectations of sellers, developers not easy

Managing the price expectations of developers and owners selling large sites en bloc will be a challenge, analysts say.

“Owners will need to understand that policy changes over the years as well as rising construction costs do impact developers’ bottom line,” said Ms Tracy Goh, head of investment and collective sales at PropNex.

These policy changes include the non-remittable additional buyer’s stamp duty (ABSD) of 5 per cent for developers and the revised guidelines on the maximum number of units allowed in residential projects outside the central area.

Ms Swee Shou Fern, executive director of investment advisory at Edmund Tie, added: “ABSD adds a hefty 30 per cent to the land acquisition cost, of which 25 per cent may be remitted upfront if the developer undertakes to complete the development and sell all units in the project within five years from the acquisition date.” This was raised from 15 per cent in July 2018.

A developer of mega projects of 1,000 units or more faces greater risk to ensure that the construction and sale of all units can be completed within the five-year timeline, said Ms Swee.

Further, the Urban Redevelopment Authority has stipulated a larger minimum average unit size for new private flats in projects outside the central area from 70 sq m to 85 sq m, and in some areas, to 100 sq m. The new guidelines apply to development applications for projects submitted on or after Jan 17, 2019.

“This affects developers’ unit pricing as larger sizes would mean lower per square foot prices to keep the new units within a certain affordable quantum,” noted Mr Tan Hong Boon, JLL’s executive director of capital markets.

Mr Andy Goh, an engineer who owns a 1,600 sq ft unit at Cashew Heights, said the collective sale offer for larger units like his has dropped to $3 million from $3.5 million, while owners of smaller units are now offered around $2.5 million, down from $3 million.

Even with the lower offers, many of the project’s original owners will still have potentially earned at least five times what they paid for their units, he noted.

“But I’m not so concerned this time round. Developers won’t take the risk, especially with the recent cooling measures still in place,” he said.

Developers are still interested in bigger sites, but ultimately, it boils down to pricing.

The reserve price for large 99-year sites must be reasonable and broadly align with the Government Land Sales (GLS) land bid trend, Ms Goh said.

“Developers may prefer to bid for GLS sites, which are also on a 99-year lease, if they feel en bloc sites are overpriced,” she added.

“Further, GLS is seen as a hassle-free way to acquire land, without a drawn-out process to garner the majority consensus to sell, or go through Strata Titles Boards’ mediation and High Court hearings to address objections.” Pricing may also be more complicated if there have been many recent resale transactions in the project, Ms Goh said.

New owners will likely demand higher compensation to factor in seller’s stamp duty penalties they will have to pay if they sell within three years of buying. This may push up the reserve price, which will make the site tough to market, she added.

Collective sale launches in 2021

Surrey Point, 2 Surrey Road

Tenure: Freehold

Asking or indicative price: $55m

Current use: Residential non-landed

Region: Core Central Region

Land area (sq ft): 11,977

Number of units: 9

Current status: Sold for $47.8m


2,4,6 Mount Emily Road

Tenure: Freehold

Asking or indicative price: $18m

Current use: –

Region: Core Central Region

Land area (sq ft): 5,549

Number of units: 3

Current status: Sold for $18m


The Bayron, 13 Devonshire and 49 Saint Thomas Walk

Tenure: Freehold

Asking or indicative price: $376m

Current use: Residential non-landed

Region: Core Central Region

Land area (sq ft): 56,841

Number of units: 96

Current status: Open


High Street Plaza, 77 High Street

Tenure: 999 years

Asking or indicative price: $239m

Current use: Commercial

Region: Core Central Region

Land area (sq ft): 13,229

Number of units: –

Current status: Private treaty stage


Queen Astrid Gardens condominium, 5 Queen Astrid Gardens

Tenure: 999 years

Asking or indicative price: $123.8m

Current use: Residential non-landed

Region: Core Central Region

Land area (sq ft): 62,237

Number of units: 16

Current status: Open


Kai Fook Mansion, 2-20 Kim Tian Road

Tenure: Freehold

Asking or indicative price: $123m

Current use: Residential with commercial at 1st storey

Region: Rest of Central Region

Land area (sq ft): 15,896

Number of units: 32 residential units, 10 commercial units

Current status: Open


Fortune Park, 109 Tampines Road

Tenure: Freehold

Asking or indicative price: $116.5m

Current use: Residential non-landed

Region: Outside Central Region

Land area (sq ft): 44,878

Number of units: 68

Current status: Open


Dublin Lodge, 28-42 Dublin Road

Tenure: Freehold

Asking or indicative price: $67.55m

Current use: Residential landed

Region: Core Central Region

Land area (sq ft): 27,020

Number of units: 8

Current status: Open


Duke’s Road, 551-553 Bukit Timah Road, 6-8 Duke’s Road

Tenure: Freehold

Asking or indicative price: $62.5m

Current use: Commercial and residential

Region: Core Central Region

Land area (sq ft): 16,479

Number of units: 12

Current status: Private treaty stage


Jansen Mansion, 25 Jansen Road

Tenure: 999 years

Asking or indicative price: $19.8m

Current use: Residential non-landed

Region: Outside Central Region

Land area (sq ft): 16,593

Number of units: 12

Current status: Open


Other ongoing projects

These are examples of some other developments that have begun the collective sale process, but have not launched yet.

• Thomson View (residential, 99-year lease)

• Spanish Village (residential, freehold)

• Ivory Heights (residential, 99-year lease)

• Lion Tower (residential, freehold)

• City Plaza (mixed development, freehold)

• Cashew Heights (residential, freehold)

• Holland Towers (residential, freehold)

“Source: [En bloc fever making cautious comeback in Singapore] © Singapore Press Holdings Limited. Permission required for reproduction”

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