Three more for the chop

Three HUDC estates in Hougang, Potong Pasir designated for privatisation

The government has identified three HUDC estates for privatisation.
The estates are located at Hougang North Neighbourhood 3, Hougang North Neighbourhood 7, and Potong Pasir.
The Ministry of National Development (MND) said the three estates comprise a total of 797 of apartments and maisonettes.
Real estate agents said the news could affect prices of these properties, which may rise 5 to 7 per cent.
“With privatisation, everyone will be happy (because) the price will be higher if we intend to sell,’ said Steven Tan. The HUDC estate at Hougang Avenue 7 which he’s been living in has been put up for privatisation.
Property agents said prices could inch up overnight.
Recently transacted prices in the three estates range from S$620,000 to S$735,000.
“I won’t be surprise some will say if I were to sell you the unit, then I am giving up my opportunity to cash in more if this development go en bloc. We’ve heard of developments where once it is privatised, the prices there sometimes rocket by S$100,000,” said Chris Koh, director of Dennis Wee Group.
Industry players said the en bloc potential for these HUDC estates is good because they are located in mature estates with more developed infrastructure and amenities.
The privatisation process could take up to two-and-a-half years.
But it will need support from three quarters of the residents.
Helen Lee, Protem Committee Member of Hougang Avenue 7 HUDC estate said: “The last time we did a survey in early 2009, more than 80 per cent of the residents were actually in favour of the privatisation. I think it shouldn’t be a problem getting the 75 per cent vote.”
The residents of each estate will have to form a protem committee comprising resident representatives to act on their behalf.
One stumbling block could be the privatisation cost, which include legal and survey cost, as well as cost of land transfer.
The Ministry of National Development (MND) will cap the cost of privatisation at $30,000 per flat for the three newly-designated estates at Hougang and Potong Pasir.
The MND said this is a concession to enable HUDC lessees to fulfil their aspirations to enhance their assets.
The concession will also apply to the Serangoon North HUDC estate, which is in the process of obtaining support for privatisation.
The capping of privatisation cost at $30,000 is only valid for three years, starting from 2 August 2010.
Thereafter, MND said the cost of privatisation will be adjusted to take into consideration the prevailing redevelopment potential of the land.
Observers said privatisation means flat owners will no longer be bound by some public housing rules like sub-letting, and they can sell or rent their homes to anyone.
Source : Channel NewsAsia – 30 Jul 2010

If these HUDC owners really know what is best for them, and their unit is their one and only home - then they should stay under the HDB umbrella.

If they go for privatisation, they will be $30k poorer,  locked out of the lift upgrading programme and struggle to maintain the estate on low maintenance fees, as owners will refuse to pay private rates yet expect private standards.  Owners seldom grasp the fact that Town Councils have the benefit of scale and can tap government contractors. When you are on your own, it's a different world altogether.

Traveling down the 'privatisation - collective sale' path means they will eventually end up in a smaller HDB anyway and hardly any richer, if at all.  I would love to know just how many ex-Minton, Waterview, Amberville, and Gillman owners ended up in HDB and how many went on to buy  bigger homes or better private properties. 

Plus the awful pitched battles that will surely follow between those who value their homes and those that want to cash out.

The Government is not doing them a favour; they ultimately want to see HUDC land redeveloped and they don't give a toss about the owners. "Move to Woodlands" is the answer you get from those supposedly elected to manage your concerns, and my personal favourite and inspiration for my logo "if 80% want to jump off a cliff then the 20% have no choice but to follow". 

More making the move to suburbia

More making the move to suburbia

Property investors with a lower budget but with a longer term perspective towards property purchases may look at the choices available in suburban areas instead of prime locations.
Analysts reckon that prices in upcoming suburban areas are still within reach and units there have upside potential as well, making them good investment opportunities.
Among the new coming areas that potential buyers can consider include Serangoon, Jurong Lake District and Punggol Waterfront Town, market experts said.
Mr Colin Tan, Chesterton Suntec International research and consultancy director, said: “Investors should identify areas with future potential and enter early to secure a pricing more reasonable than some of the developed areas. In the long term, say about five years, the price may rise 20 to 30 per cent.”
Mr Tan noted that since the opening of the Integrated Resorts, property prices in suburban areas have also increased sharply from between $400 and $450 per square foot to about $800 psf.
Experts said some developments within the suburban areas have become popular mainly because of their proximity to the new and less heavily-used Circle Line.
In addition, they observed that more expatriates are settling away from the prime areas as well, creating more rental opportunities for unit owners. “Expatriates are increasingly moving into suburban areas to save on the housing allowances. Meanwhile, a greater proportion of foreign and permanent resident Chinese and Indian buyers are also doing so because of their preference,” said Ms Chua Chor Hoon, senior director of research at property consultancy DTZ.
Among the new upcoming areas that are expected to see a vibrant community when fully developed are Kallang Riverside and Jurong Lakeside District.
When completed, Kallang Riverside will see a new Sports Hub, an additional 400,000 square metres of commercial space, 3,000 hotel rooms and more.
Meanwhile, the Jurong Lakeside district will be developed into a major regional centre, featuring a commercial hub and leisure destinations for locals and tourists.
“The overall development in these areas can give an uplift to prices in the region, ” Ms Chua added.
But industry experts noted that to keep the selling price palatable, developers may build smaller units.
In addition, Mr Tan cautioned: “Because these new sites need at least three to four years to develop fully, investors should be careful about timing the market and be prepared to hold the units.”
Meanwhile, for those with deeper pockets, industry watchers still recommend the prime area properties.
“For investment, it is good to buy into prime areas with good resale and rental value. In these areas, prices have not climbed to its peak and there is more upside, therefore, there is less price resistance,” said Ms Chua.
Source : Today – 30 Jul 2010

PASTORAL VIEW

Pastoral View condo teams up with adjoining site for en bloc sale

A condominium near Novena MRT is teaming up with an adjoining site for an en bloc sale.
The 50-unit development Pastoral View is being offered for joint sale with an adjoining land parcel at Bassein Road.
Property consultant Credo Real Estate says the sellers are looking at a price of between S$130 million and S$150 million.
Credo adds that by combining the two sites, developers will find the enlarged land parcel more attractive as they are able to enjoy economies of scale.
The combined site has a land area of 51,395 square feet.
It has a gross plot ratio of 2.8 and an allowable height of up to 36 storeys, making up a total gross floor area of about 144,000 square feet.
Credo says upon redevelopment, the site may accommodate a high-rise tower of 140 apartments with an average size of 1,000 square feet.
It adds that the asking price translates to a land rate of
S$904-S$1,043 per square foot per plot ratio, after factoring in a development charge of about S$157,000.
More than 80 percent of the owners at Pastoral View have already signed a collective sale agreement to sell their properties together.
The tender for the site closes on 23 August at 2.30pm.

Source : Channel NewsAsia – 26 Jul 2010

Enbloc sales: Still going according to plan

Enbloc sales: Still going according to plan

SUNDAY'S PAPER

Signs of another en bloc rush

Posted by luxuryasiahome on July 19, 2010

Sale proceedings may have begun at up to 80 developments, with many more to follow
They were a feature of the last boom but fast fell out of favour when markets went south, yet there are signs that another collective sale rush is in the making.
There have been at least 16 collective sales this year, not counting many smaller ones that may have gone unreported.
This is in stark contrast to last year, when only one collective sale was sealed. There were 10 in 2008 but most were late spillover deals from the boom of 2006 and 2007.
The greatest spell of collective sales remains the first six months of 2007, when at least 55 projects were sold for an astounding $9.3 billion.
The slow start this year is not due to a lack of demand for collective sales, but a shortage in supply arising from the extra time needed to meet the tougher legal formalities and more detailed logistical arrangements when gathering owners’ consent.
We should certainly see more collective sales over the remaining months of the year as the organisational momentum picks up pace.
As many as 80 developments are believed to have formally embarked on steps to sell their properties en bloc, although the actual figure may well be more. But not all will secure the 80 per cent owners’ mandate or find a buyer.
Numbers aside, larger projects are also expected to be introduced this year and next.
The average deal size of the 16 successful cases this year is $50 million – a far cry from the average deal size of $170 million in the first half of 2007.
The 52-unit Goodrich Park near Kovan MRT station was sold in a collective sale to BBR Holdings for $86 million this month, but as the deal has not won unanimous approval from owners, it may need approval from the Strata Titles Board (STB).
Each of its owners is set to receive gross sale proceeds of between $1.55 million and $1.72 million – or about 70 to 80 per cent more than the market price.
In April, Culford Gardens in Siglap was also sold to Fragrance Properties for $39 million.
Despite the dominance of the Government Land Sales (GLS) programme this year, we believe that collective sales are still relevant in today’s market as they fill the void left by the programme.
GLS sites have leasehold tenure and are mostly located in suburban areas, and their large-sized plots mean they typically cater mainly to bigger developers.
In most cases, collective sales complement the GLS programme, especially when they produce large prime freehold sites, which are in short supply.
However, leasehold collective sales in mass-market locations might find it harder to make large profits as developers might prefer the relative ease and certainty that GLS sites offer.

Owners contemplating such sales should also understand that sale activity takes place in waves since the factors that give rise to price differentials do not stack up for very long.

Many owners get concerned over the rising cost of replacement homes but this paradox is always present as collective sales inherently occur only when the market is buoyant. Acting decisively might help offset the risks of being caught cold.
It is also important for owners to elect objective and honest leaders, appoint and listen to competent lawyers and property consultants, set realistic prices, act decisively and stay united to ensure a happy ending.
Some owners might also wonder if there is a possibility that we will see another Horizon Towers dispute.
Horizon Towers was the most high-profile property sold in early 2007, just before the steep run-up in land prices. This factor and other technical irregularities resulted in the Leonie Hill Road condo becoming embroiled in one legal suit after another before the deal finally collapsed.
Since then, the laws have been refined. They now load more work and costs upfront for the owners, providing relief for developers with clearer rules.
Recent changes include the STB being relieved of its role of making rulings in disputed cases. The STB will continue its mediatory role, but this will be limited to 60 days – again to expedite the resolution of disputes over contentious sales.
In other words, warring parties can head to the High Court earlier in the process to have their disputes resolved, reducing the time taken to resolve the more difficult cases.
Minority owners are now unlikely to find as many faults as most of the typical grouses in the past have been adequately addressed. As a result, we expect fewer cases to reach the High Court and the Court of Appeal.
As we also do not see the market moving this year and next as dramatically as it did in the boom years, the motivation for a minority owner to challenge a sale may not be as strong as in 2007.
The laws are more robust and structured now and should make collective sales less controversial and more predictable.
By Karamjit Singh, managing director and Pamela Kow, senior manager of Credo Real Estate.

Source : Straits Times - 18 July 2010
.

In other words: the developers like to buy only when they can get the land cheap from the owners  - and owners must understand that the developer is king and if they offer you half replacement cost then you have to either take it or leave it. Mr. Credo-guy is urging leasehold owners to take it - better half a loaf than none at all (in his books). Keep pumping the idea that en bloc must happen eventually - never mind the alternative of just leaving well enough alone and staying put in your fine and dandy estate. Who lives to be 150 yrs anyways.

 This paradox is always present! And isn't that what we en blockers have been harping on about for years! Premiums are ETHERIAL , they do not hold, the en bloc price is about as good as a gallon of water in a leaky bucket or  a tyre with a slow puncture. And instead of shortening the process to reduce the effects of this inherent paradox, the LTSA has been tweaked to lengthen and thus exacerbate the problem.  The sale committee have 1 YEAR to collect 1 SIGNATURE and another year to collect the rest, and yet another year to apply to the STB for sale. 

I wonder how much money Credo Real Estate has made from all these en blocs, multi-millions no doubt ...... Mr. Credo-guy pushing out yet another self serving article masking his real interest in seeing that the party continues!

.

Selling en bloc? Big gains unlikely

Prices now start from a higher base and attractive prime sites have already been sold
Last Wednesday, a relatively small property, Melrose Court, off Balestier Road, was launched for collective sale.
Owners of the 32 freehold units there are
asking for $48 million, and hoping to reap between $1.23 million and $2.46 million each.
Marketing agent Colliers International said the ‘en bloc’ premium each seller will get is around
40 per cent to 50 per cent more than what he can get if he were to sell his unit on his own.
Compared with those of the collective sale boom of 2006-2007, the premiums are lower these days because existing apartment values are high, said Mr Ho Eng Joo, the firm’s executive director of investment sales.
Property pundits say the market recovery last year has been fast and furious, so prices are now starting from a higher base.
‘We see an erosion of en bloc premiums today. In 2006 and 2007, the premiums can easily be 80 per cent to 100 per cent. Today, they are more like 30 per cent to 50 per cent,’ said Mr Jeffrey Goh, head of investment sales at HSR International.
Some investors may want to cash in fast before the collective sale. This will close the gap between the potential collective sale price and the individual sale price, experts said.
But the higher prices they fetch may not be a true reflection of the market, said Knight Frank executive director Nicholas Wong.
‘A handful of them may be able to sell at higher prices before the collective sale. But if all the owners were to go out and sell their units individually, they wouldn’t get those kinds of prices,’ he said.
The rest of the owners who may now want to pull out of the collective sale after some sell at higher prices, or who then become unhappy with the collective sale prices, should be aware of the risks of a failed sale, as the value of their estate will likely come down if that happens.
Also, today’s new rules mean that a two-year restriction period will kick in, making it harder to restart the collective sale process after a failed attempt, Mr Wong said.
An expert, who declined to be named, said: ‘The en bloc premium is relative. It just has to be a level that can get people excited, with which they think they are able to find a replacement property. This would be around 50 per cent more than what they can sell at individually.’
Besides prices having moved up to a higher base, most of the attractive prime sites have already been sold in previous collective sale booms over the past 15 years, property experts say.
‘Nowadays, sites that have been sold or put up for sale are in the city fringes and are small,’ said Ms Suzie Mok, director of investment sales at Savills Singapore.
‘The en bloc premiums for prime spots tend to be higher than those for suburban estates as they are the more sought-after sites. The prime spots appeal to the bigger developers who are willing to pay more because of their scarcity and the appeal of the posh address.’
While there are still underbuilt sites out there, many of the estates eyeing collective sales today are very old developments and may have low redevelopment potential, experts said.
Some of these estates have already used up their maximum built-up area allowed, and may thus get a lower premium when they want to sell en bloc, the experts pointed out.
Source : Sunday Times – 18 Jul 2010

Yes, but thinking and knowing are two different things. Owners now KNOW they cannot get a comparable unit at some future point in time. as the market stands still for no man. The only way to GUARANTEE a replacement unit is to arrange a 1-for-1 exchange for those who want it.

Changes to Land Strata Titles Act effective from 15 July

Changes to the Land Strata Titles Act will be effective from Thursday, 15 July, after the Amendment Act was enacted in Parliament on 18 May. 

The amendments seek to provide more clarity to the en bloc sales process and balance the interest of property owners. 

Among them, a two-year restriction period will be imposed starting from the date an initial collective sale attempt failed. 

The objective is to discourage numerous attempts at en bloc sales when there is insufficient interest from the owners. 

The first re-try to convene an Extraordinary General Meeting to reappoint a sale committee will need the backing of at least 50 percent share value or total number of owners. 

For second or subsequent re-tries during the 2-year period, 80 percent will be needed. 

Currently, the requisition threshold is set at 20 percent by share value or 25 percent of the total number of owners. 

Another amendment is that the Strata Titles Board will be empowered to issue a "stop order" to cease mediation once it becomes clear that the affected owners want adjudication to be done in court. 

Currently, the Strata Titles Board mediates and adjudicates on objections filed by minority owners in en bloc sales. 

The change could help to reduce the costs and time taken to resolve more contentious en bloc applications. 

Some of the changes will apply to the en bloc sale committees. 

Among them is the requirement for those standing for election to the sale committee to declare the extent of ownership that they or their immediate family have in the development. 

To ensure that the sales process is not dragged out, the sale committee will have one year to obtain the first signature for the Collective Sale Agreement, or it will be automatically dissolved. 

The one-year time frame will start from the date the sale committee is formed. 

These changes will apply to en bloc applications made on or after the date of commencement of the Land Titles (Strata) (Amendment) Act.
CNA: 15 July, 2010

Older condominiums still selling at a loss

Older condominiums still selling at a loss

Despite complaints about ever-rising property prices, some private properties are still valued below their original purchase price.
Shin Min Daily reported that even with the recent boom in the property market, some condominiums which are more than 10 year old are priced about 20 per cent cheaper than newly built ones.
Home buyers in Singapore tend to favour the latest ‘flavour’ on the market, property prices seem to indicate.
Many of these properties were built and bought around 1996, when property prices were also at a peak. Now, 14 years down the road, these properties are still valued at prices below their sale price in 1996, forcing some home owners to sell at a loss.
Property agents told Shin Min Daily for about 20 per cent of the houses that were built in that period, the resale price is still lower than what the owners paid in 1996/7 – even for those near MRT stations and good schools.

Still selling at a loss
One of these under-valued condominiums is Bishan 8 which is located at the junction of Bishan Road and Bishan Street 21.
Attracting long queues of interested buyers when it was launched in 1997, units in Bishan 8 were priced at $1,100 per square foot (psf) then.
Last month, one of the units there was sold for $912 psf. For a unit of about 1,162 square feet, the owner would have lost about $220,000.
Another property launched at Stevens Road in May 1997 was selling at $1,900 psf, but in March last year one of the units was sold at $1,620 psf.

May recoup investment within five years
PropNex CEO Mr Mohd Ismail said that with new developments being pushed out all the time, home buyers have more than enough choice and many prefer the new apartments.
Ngee Ann Polytechnic real estate lecturer Mr Nicholas Mak felt that buyers may find the older condominiums’ design and facilities outdated.
But Mr Ismail also said that owners of older condominiums may be able to recoup their investment in three to five years.
“As the property market improves, the prices for the older properties will also rise. I believe that the prices will be on par with what they paid within five years,” he said.
As the properties are at prime locations, he believes the owners will eventually be able to make a profit.
Source : AsiaOne – 15 Jul 2010

MENG GARDENS

A collective sale is said to have been sealed for Meng Garden Apartments off Killiney Road for $137 million or about $1,380 per square foot per plot ratio, including an estimated development charge of $681,000. 

This is the biggest collective sale transacted this year and the first in a prime district.

It also takes the year-to- date tally to 16 deals at about $786 million.

Boutique developer TG Development, the buyer of Meng Garden, will not have to seek the Strata Titles Board's approval for the transaction as CB Richard Ellis, which brokered the collective sale, had secured 100 per cent consent from the owners prior to the property being put up for tender last month.

The 35,639 sq ft freehold site is zoned for residential use with a 2.8 plot ratio and a 10-storey height control.

The site can potentially accommodate a new development with about 95 apartments averaging 1,000 sq ft each.

The existing eight-storey block comprises 26 apartments and a penthouse, with over half the units owned by an extended Lim family.

The tender for Meng Garden closed on July 7 and is understood to have attracted six bidders, including mid- and large-sized listed developers.

Meng Garden is located on Lloyd Road and was built in the mid-1980s. Prior to its development, the site was the original residence of the Alkaff family.

The 16 collective sales at $786 million so far this year is a marked improvement from last year's solo deal at $100.8 million and the 2008 showing of eight transactions for a total $346 million.

'Whereas most of the deals so far this year have involved sums below $100 million and were primarily outside the prime districts, we could see bigger sites and a few more in the prime districts coming to the market in the current half,' said CB Richard Ellis executive director (investment properties) Jeremy Lake.

He predicts that the full-year tally could cross the $2 billion mark. 

Credo Real Estate managing director Karamjit Singh noted that the 13 collective sale deals in the first half of this year averaged $40 million per transaction - a far cry from the peak of the en bloc sale fever during the first half of 2007, when there were 55 transactions averaging $170 million each.

'For H2 2010, we expect to see 20-40 successful deals, which would mean a doubling from the first-half performance. We also expect the average deal size to somewhat double to $80-100 million in H2 2010.'

However, most market watchers are not expecting the peak volumes seen in 2006 and 2007 - when $7.8 billion and a record $11.6 billion respectively were done (according to Credo figures) - to be re-visited anytime soon.

CB Richard Ellis' Mr Lake argues that some collective sales are no longer viable due to the high cost of replacement properties. 'The cost of the replacement property has moved up to an extent that the en bloc premium is no longer attractive to owners,' he said.

'As a result, the number of viable collective sales that agents are working on has diminished.'

Mr Lake also observed that back in 2006-2007, land prices appreciated so quickly that almost every collective sale effort worked. 'However, prime district residential land prices currently are not back to their previous peaks, which mirrors the price trend for new residential units.'
Business Times: 14 Jul 2010 

Melrose Court

  Melrose Court sold for S$44m in en bloc sale

Melrose Court in Balestier has been sold for S$44 million in a collective sale.
The 32-unit residential development at No.10, Lorong Limau was sold to local boutique developer Melrose Land.
The property’s broker, Colliers International, says that Melrose Court is not linked to Melrose Land and notes that the sale is subject to the approval of the Strata Titles Board.
The freehold residential site has an area of 23,789 square feet.
Under the 2008 Master Plan, it has a gross plot ratio of 2.8.
Including the development charge of about S$277,235, the sale price translates to a land price of about S$665 per sq ft per plot ratio.
Colliers International says that upon approval, each owner is expected to receive gross proceeds of some S$1.129 million to S$2.261 million from the sale, depending on the size of their unit.
It also says that the site could accommodate a residential development of up to 36 storeys, comprising some 88 units of 830 sq ft each.
Source : Channel NewsAsia – 1 Sep 2010

 

Melrose Court up for enbloc sale

The hot property market has seen yet another residential development going up for en bloc sale.
The public tender for the collective sale of Melrose Court at No.10, Lorong Limau has been launched.
The freehold site is currently occupied by a four-storey residential development comprising 32 units.
It has an area of 23,789 sq ft.
The site is zoned for “residential” use with a gross plot ratio of 2.8 under the 2008 Master Plan.
Property consultant Colliers International says it can be re-developed into a 22-storey residential development with a total gross floor area of 73,271 sq ft.
This includes an additional 10 per cent allowed for balcony space.
The new development can accommodate some 88 units of 830 square feet each.
Colliers International says the indicative price is about S$48 million, which works out to some S$688 per square foot per plot ratio.
This includes a development charge of about S$2.38 million.
Colliers International adds that over than 80 per cent of the owners have agreed to the sale.
Based on the asking price, each owner could reap between S$1.23 million and S$2.46 million from the sale.
The tender will close on August 12.
Source : Channel NewsAsia – 14 Jul 2010

CAVANAGH MANSIONS

CAVENAGH Mansions and Goodrich Park Condominium have been sold following their respective tender closings last week. Both sites are freehold.

GOODRICH PARK

BBR to buy freehold land at Simon Lane for S$86m

PEOPLE'S MANSION

People’s Mansion in Geylang sold for S$42.7m in collective sale