SC Meeting: 16 Apr 2011

SC Minutes 2

Are these really the minutes of a 5 hour long meeting?.... it looks more like an attendance roll.  The vast majority of owners who did not attend as observers would have no clue as to what went on. This minimalistic style of minuting is not acceptable; it is lazy and totally non-transparent in the long run.

The onus is not on owners to attend meetings in order to keep abreast of what's going on, but for the SC secretary to write comprehensive minutes of the proceedings for everyone to read.

Sat 16 April, 2011  A fly on the wall's viewpoint

Five marketing agents  made their pitch one by one followed by a Q&A session.

On reflection, perhaps it is best for the sale committee to publish it's minutes first as I wouldn't want to 'disturb' any negotiation by alerting competitors to each others weaknesses.

So generalities will have to suffice for now.

• The proposed reserve prices ranged from ridiculously low to within possible 70+% reach.
• Presentation was similar though a couple stood out in their polished performance giving a positive appraisal of the estate and a bullish assessment of the market. 
• The firms ranged from big to boutique. 
• Solo performers to 'Men in Blue' - replete with architect as wing man. 
• One was cagey about showing his workings, as if it were inside information. It's no surprise his proposal turned out to be the lowest. 
• Another had absolutely no problem in offering up his calculations for scrutiny.
• One inexplicably used 2010 GLS sales in Jln Eunos and Hougang when we have GLS sales much closer to home in Tampines and Simei. 
• One wanted to choose the law firm as he had had trouble with some firms in the past.
• Some preferred mass signings whilst another wanted to go about the estate signing at any hour of the day and thought the lawyer should be at his beck and call.
• One highlighted their big business connections, another his legal expertise. 
• Even on first blush, you could tell the sharks from the minnows, which ones would most likely cause property agent problems akin to round 1. 
• Only one tried the goondu method of individual unit price and 'premium', the others realised how owners in general have savvied up since 2008.
• One was involved in two big High Court cases which involved setting precedents in two areas; supplemental CSAs and conditional signers, though of course, this was not mentioned. 
• Only observers asked about 1-for-1 exchange and height restriction. 
• All 5 marketing agents thought that TC could be rebuilt up to 36 storeys when in fact we have a height restriction of 49 m AMSL. The Tampines area will  only have it's first 36 storey building when they decide to move Changi Airport to Jurong.

I have to say kudos to some  of the sale committee members, but  perhaps trying to gauge 5 prospective marketing agents over five and a half hours was a case of too much information, delivered too fast and in not enough fine detail.  The SC has the printouts to pore over  and hopefully they will spot the holes and miscalculations.. eg:

• I have a sneaking suspicion not one of the MAs added the Bonus GFA when computing the total saleable area - thereby awarding the developer an extra 10% GFA on top of their 'reasonable profit', - and 10% is 196,603 sqft. The total saleable area is therefore 2,064,336 sqft  and NOT 1,966,034 sqft.

• And what was the Value on Completion @ ???? sqft. I hope it was $1200 -1400  and NOT $800.

• Did I see efficiency at 85% on one proposal? Shouldn't that be 95%?

The residual land value method might be subjective, but millions can be given away with a snip her, a snip there. I hope the SC have done their own RLV spreadsheet to plug in the various values.
etc, etc, etc...

The slides flashed by so fast and it was hard for me to read the small print from the back of the room. Scrutinizing every detail was not possible in such a setting, with time as a constraint.
I hope all interested owners can get a closer look at the selected proposals before the EGM so we aren't all squinting at the screen trying to do lighting speed mental arithmetic before it vanishes from view.

My own personal view is that  the highest proposal might appeal to a good number at the beginning - especially to those who view their units as investment or plan on downgrading.  But it will lose it's shine quickly if the market continues on it's upward path, especially to those looking for a replacement home with some cash to spare.

The highest proposal does not reach my expectation.

13 April 2011

To the SC: Don't accept approximations, or a lumped figure for development cost or development proceeds - get the breakdown. These figures will have to undergo further scrutiny by interested owners.