We are being surrounded...

......by MRT stations within easy walking distance.

Construction of Tampines West, Bedok reservoir MRT stations to start this month

Why an Independent Valuation is necessary.....

Anonymous said:

"Those who suggest independent valuation before setting the RP are naive. You get 10 different valuers, you will get 10 very different valuations. I can tell you now that you will get 10 different figures ranging from $1.2m to $2m for each unit. Those who have work with valuers will know. Valuation is not science but very much an art. Do not waste our money(probably cost from $20k to $100k, again different valuers charge differently) going for valuations!!!"

Those who suggest independent valuation before setting the RP are naive.

No, those who suggest an independent valuation do so from first hand experience of a failed en bloc, having been to court, having sat and listened to how a valuation can be scrutinized and dissected into it's smaller parts. Having watched a valuer from a 'top' company squirm in his seat trying to justify the unjustifiable.  

An independent valuation is the only way to counter an improper marketing agent proposal, it will definitely make him squirm first. An independent Valuer (at the beginning of the process) is paid for his services and has no vested interest in setting the price at other than the computed amount. A marketing agent has a vested interest in setting the price low enough for his commission. He will fight  to stop owners from getting a valuation done.

It is the owners who feel they can trust a marketing agent to set the reserve price are the ones being  naive - doubly naive for being fooled twice with the same trick.

Valuation is not science but very much an art.

Yet, it is still imperative that one be done because no one  buys, sells or builds anything without doing a valuation first. Has a developer ever said  "let's dispense with this arty valuation and bid any price we feel like? " or" Let's just build without checking the valuation figures, it's not science'.  Will a marketing agent dare approach a developer with a piece of land without having worked out  the figures to show in advance (not the ones shown to us 'naive' owners) ...Noooo!  Developers and Agents apply this 'art' very well (and they have the means and personnel to do it in-house ) and it is an indispensable part of the construction and real estate industries. We, in Tampines Court, require this art, too. We need to know what our land is worth to these other 'artists'. We are not content with just the marketing agent's own  'artistic' valuation.

The Residual Land Value method is the trusted method used by the developers themselves to work out costs.  

It is based on IMMUTABLE FIGURES such as site area, plot ratio, development baseline.

It is based on KNOWABLE  figures for Tax, Stamp Duty, Government levies and other Financial costs. Without the RLV no developer could ever tender for land or put one stone on top of another. Agents want this RLV to be hidden from owners. They want you to look at their computations only. 

• No formal valuation means owners have nothing with which to challenge Agent figures 
• No formal valuation means no basis on which to  compare  the Valuation done at tender closing.

They want you to wait 2 years to do the mandatory Valuation - (which will be rubbish anyway as no real computations will be given) - by which time no valuer can be truly independent knowing that a big developer is waiting for his prize and a valuer cannot afford to offend the big boys and jeopardise his business in the long run. (It took MONTHS for the minority in round 1 to find a single valuer brave enough to go up against the majority valuer at the STB.  At one point, it looked like an overseas valuer was the only option left).

Do not waste money!

$67 / unit ($30k / 80% )

But more than that, more than the few miserable dollars it would cost collectively....

Owners who set about selling off their neighbours' homes against their wishes have a MORAL DUTY and a DUTY OF CONSCIENTIOUSNESS  to see it done properly. The above Anonymous cavalier attitude and parsimonious approach is a affront to all the  decent, hardworking and honest people in this estate.

And why it is  too late to do one now....

With regard to Comment no. 1;  he makes a very good point. I've had to pull myself up and weigh between my  desire to see things done straight down the line and acknowledge my gut feeling that it will do more harm than good as  it will clearly come too late in the process.

An independent valuation should be the first order of the day in any collective sale. It is not a question of price, an ethical owner would not begrudge the minor cost if he had the best interests of the estate at heart.   It should be done before a the marketing agent is chosen and before anyone can muddy the water with their prejudice.  How to collect the money, how much and from whom should have been the first priority of the sale committee, but it was not.  TC has missed the boat on that one again. Who knows what went on at the committee meetings; I am sure some SC members must have thought it necessary to do a valuation, but the fact that it has not been even attempted up to now means they are possibly being out-gunned on the votes. I do not know, I am just hypothesizing. 

Because Round 2 has been an agent-driven en bloc right out of the starting block, getting a valuation done was never going to happen. Yes, it appeared as a possible resolution on 3 of the requisition forms - you can promise the moon when getting people to requisition -  but it did not make it to the agenda of the 2 EGMs held up to now.  Even if it were included in the next EGM and passed by the floor, it can never be trusted to be truly independent as we now have a marketing agent on board and a RP on the table. It might be as worthless as the rubber-stamping valuation at the close of tender. Who will it serve best;  the owners or the marketing agent?  The marketing agent.

Both the sale committee and the  owners  have lost the high ground,  indeed we lost it at the first EGM when TC owners sent the SC on it's merry way without direction. We have let agents run the show and so have little choice left except to let them pick up their under-valued ball and run with it.

As, comment no. 3 correctly says: discerning owners will not sign for this under-valued ball.

EGM 3

Reset for 24 SEPT 2011

Here is the Requisition Form for EGM 3. The 'at least 20% by share value' owners are requisitioning for these motions to be on the Agenda.

We are 7 months into the collective sale attempt and it is clear things are not being done in a logical order.   Indeed as a property-agent-driven-sale from the start, things are going exactly the way the property agent brigade want matters to go: ie the old way.  

The main  issues above could have and should have been dealt with by the owners 7 MONTHS AGO, they also could have been raised in EGM 2 under 'other matters'.  But they weren't.

It was at the FIRST EGM under the missing half of the motion AND ITS POWERS, DUTIES OR FUNCTIONS  of the sale committee that the valuation report/ slush fund for miscellaneous matters could have been decided. We were denied half the motion by our  managing agent, even though I had written in with a motion to amend the motion for it's inclusion and had my list of powers, duties or functions all ready on the day (Valuation Report before marketing agent selection being No. 1 on the list).  The herd mentality from the floor was strong, the speakers were property agents and en bloc raiders determined to do things their way and the mood swayed in their direction.  The leader in this en bloc sale attempt, the requisition starter, the one who wanted questioning of sale committee candidates restricted, has turned out to be none other than the Marketing Director for Team ERA.

Resolutions 

1: To resolve and approve the terms and conditions on the CSA. 

2. To resolve and empower the SC on appointment of an independent property consultant for report on apportionment of sale proceeds.

And when are the owners going to decide on their preferred method of apportionment? Will there be an EGM 4? Or are we being asked to let 10 owners decide alone on this  matter?
The SC should not be allowed to choose the valuer; that can easily be done by the owners themselves at the scheduled LTSA Owners' meeting between 80% and tender. The SC can line up 3 valuers for owners to choose from.

3. To resolve and decide on the Reserve Price

4. To resolve and decide on the need for independent Valuation prior to fixing RP and empower the SC to appoint the independent valuer.

It is too late now. The well is poisoned, we have an MA on board and a proposed RP .
.

7. To resolve and authorize the MC to permit the sales committee to use the conference room at no cost.

8. To resolve and authorize the SC to use the void decks for any meeting of the SPs with the Solicitors for signing the CSA or meeting SC members.

This EGM will be the CSA EGM and the CSA MUST include the following (FIRST SCHEDULE):

3. The collective sale committee shall provide a preface to the collective sale agreement stating the clause numbers and page numbers in which the following information are found:
(a) the reserve price for the development; 

(b) the apportionment method for the proceeds of sale;
(c) the fees payable to the advocate and solicitor, marketing agent and other person involved in handling the collective sale;
(d) the amount of the compensation fund, if any; 

(e) the person entitled to any interest derived from moneys held by any stakeholder; and 

(f) the date of delivery of vacant possession of the lot or flat.

NOTE WHEN MAKING COMMENTS:

PLEASE DO NOT STATE THE RP IN YOUR COMMENTS AS IT IS OSTENSIBLY CONFIDENTIAL - THOUGH IT WILL SOON BE AN OPEN SECRET....  IT IS A HASSLE FOR ME TO DELETE

Lengthy Silences

I have been very lenient on the sale committee up to now as they cannot all be tarred with the same brush. There are some good 'old' owners who genuinely want to see the sale done properly. They have tried to be inclusive by inviting all owners to attend their meetings and the last few minutes have been well written and informative, as they were written by the same 'old' owners mentioned above. So, it is difficult for me to be anti-SC without giving due regard to those good contributors but - in my humble opinion -  there is the other half of the sale committee which cannot be trusted one inch.

With a new en bloc lawyer on board, things might go on very differently from now on. We shall see.

We have heard nothing from the sale committee since the EGM. We do not know the official outcome of that meeting, whether the elected lawyer and marketing agent have signed an agreement, or indeed seen the agreement that they signed. It is binding on owners, so we need to see it, thank you.  When can we expect the minutes of the meeting to be posted? Will there be a transcript? And what of the CSA, what is happening there? Are owners requests being pooled? Has there been any attempt to canvas for owner input?

My main grouse is this: the sale committee has not developed a direct and speedy form of communication with the masses. Some owners rely entirely on my blog for information which should not be, as I glean my info from here and there and not from the SC directly. The SC emails owners on a selective basis (eg. the minutes of meetings);   I have a very serious problem with 'selective' because to me anything 'selective' should be avoided at all costs. There is no way the SC can gather every email address in the estate, and even if it tries, there are bound to be some who simply never use the computer.  What are the options open to them?

A blog: no attempt at all on this front as yet.

The letterboxes are locked, and even though the managing agent does have a master key it cannot be used in the service of owners, no matter what group they belong to. I would scream blue murder if I found an anonymous letter or (unfranked) SC letter nestling in there. The managing agent cannot be there at the beck and call of ANYONE.

Which brings us to the topic of Notice Boards:

There are 23 Notice Boards in the estate (including the MC office board).  The Notice Board is common property and is managed by the Management Office. They are locked and no one can put things up willy-nilly, it would have to be approved by the managing agent first. As common property, it is maintained with estate funds, which naturally come from all owners in the estate.  The sale committee cannot use estate funds for it's activities, save holding the required EGMs. The LTSA states that the meeting minutes and the very important 4 weekly CSA signature collection notices be affixed to the Notice Boards.

The sale committee are requesting to use the Notice Board to post other material. 

Now, the sale committee is just one group  in the estate, albeit elected, but still just a group of owners with a cause to peddle. It does not seem right that the Notice Board be opened to them alone since there are other individuals/groups who would have equal claim to air their viewpoint and therefore equal claim to use the board. We all pay the same fees remember. 

The simple nub of the matter is this: special consideration cannot be shown to one group alone, as it would breach the impartiality of the managing agent and improperly annex common property to further the cause of one faction . The Notice Board, if it is to be open at all,  must be universally open to every owner in the estate to post as he or she pleases (within rules laid down by the management office, of course).  It must be a case of ALL or NONE.

NEXT  EGM:     possibly set for 10 Sept, or so I believe.    Agenda?  No idea as yet.

That patch of land next door...

The HDB are going to build 148 STUDIO APARTMENTS  called GOLDEN CARNATION on the land.

Not bad!

Studio apartments are reserved for the elderly -   mere whippersnappers at 55yrs if you ask me.

I doubt if this will result in more traffic pouring out onto Street 11 as they probably won't have too many cars between them. Some might say that this will depreciate the value of TC, but this is sheer nonsense. I am sure they will be quite nice, replete with a nice garden area.   Since we are surrounded by HDB already, one more won't make any difference.

What's happening about town

At the STB today:
ERA is handling the collectives sale at MARINE POINT.
CapitaLand to acquire Marine Point - CNA Jan 2011 

A valuation on the estate had been  done some time previously ( date unknown to blogger).

The tender for Marine Point closed on November 18, 2010  with no tender bids. It was subsequently sold by Private Treaty. A new valuation was done by Knight Frank which showed that the older valuation was too high. The RP was reduced and 80% of the owners signed for the reduced RP. The minority (a 70yr old woman who speaks no English and is clueless about valuations)  is objecting to the sale at the STB.  She is not being legally represented and cannot fight fire with fire.

At the High Court tomorrow:
Glenville High Court at 10am.

Just discovered:
The STB has finally decided to put up it's written decisions on past collective sales here (alas, TC is not one of them). Excellent decision by someone at the STB. If only MinLaw would be so good. All such decisions (legal and quasi-legal) are public, paid for out of the public coffers, and should by right be accessible to the public freely and for free.
IMPORTANT READING: FINLAND GARDENS : A lesson on how sneaky agents can be, paying off the last 3 owners to reach the 80% (conditional signers), fending off higher offers because 'negotiations are at an advanced stage' with another customer.

EFFICIENCY

Since I do not have inside information on how much of the permissible GFA a development has utilized, I shall try and figure out an APPROXIMATION ONLY by using a deductive  method.

Now we know the permissable GFA is site area * plot ratio.
The 10% bonus GFA is added on to give a total of 110% GFA.

We can trawl the government data bases to choose recently sold out or nearly sold 99yr developments in the suburbs. One website gives the total number of units & the total number of units sold in a given development. Another website tells you the strata area of each unit sold by the developer (New Sale).  Now the developer will sell non-GFA area as GFA (ie planter boxes, PES etc) and I am assuming here than all this sold GFA must not exceed the  Master Plan GFA + 10%.

You know by now, how I love making tables:

I estimate the outstanding Strata Area of un-caveated units to be a conservative 93sqm (1000sqft). Given this conservative figure, it seems most of the estates are running at high  efficiency - remember 110% is the max.

I shall be keeping an eye on these estates to see how their actual caveats add up. This may not be the best way to figure out the efficiency, but without access to actual developer data, I cannot think of another way.

Actually, I can; if a developer is kind enough to publish the strata area of all the units in the estate either in it's sales brochure on on it's website (and very few are), then that would be a big help. I undertook to do this job last year  but after the tedious task of adding up all the units in The Interlace *, The Minton, Flamingo Valley & Lincoln Suites, I pretty much gave up the ghost. But I have added the figures to the table... and surprise, surprise - those estates have estimated efficiencies that look like 95% + 10% to me.

*I could only find the strata area for the 1040 units in The Interlace, the house strata area is therefore unknown

Tender Closes with no buyer

Laguna Park’s 2nd en bloc sale offer closes

The tender for the collective sale of Laguna Park has closed with no confirmation of a buyer.

Its marketing agent Knight Frank declined to elaborate if any bids were received in the tender, or if the bids matched its reserve price.

But Mr Nicholas Wong, executive director of Investment at Knight Frank said that it is, “in the process of negotiating with an interested party”.

The marketing agent has another 10 weeks to finalise a sale or negotiate a private treaty with interested parties, before the en bloc process collapses.

Experts speculate that Knight Frank’s reluctance to reveal more details could mean a lack of strong interest for the site.

“It doesn’t sound very good because from experience when the agents are very confident, they will say they have received six bids, and they may say things like the bids have mostly exceeded the reserve price,” added a property analyst who declined to be named.

“Off course, they have an agenda when they say something like that because if that gets published, the potential bargaining power of the developers is not so strong.

“But if the agent does not want to say anything, it may not be a good sign, it may mean that, for an example, all the bids are below the reserve price,” the analyst added.

This is the second time the 33-year-old condominium has been put up for sale.

The asking price this time is S$1.33 billion, about 11 per cent higher than the S$1.2 billion price tag in an earlier attempt in October 2009.

If the sale goes through this time, Laguna Park residents could pocket about S$2.2 million each from the successful sale of the property.

Observers said the timing of the tender closure could go against the sellers.

“The market sentiment has been quite weak lately. Right now, there’s a debt crisis in Greece and a possibility of a default. It would have been better if it closed a bit later,” said Mr Colin Tan, head of research and consultancy at Suntec Chesterton International.

“Some recent en bloc sales have also lowered their asking prices from previous attempts,” he added.

Based on the potential gross floor area of about 1.9 million square feet, the land price on a per square foot per plot ratio basis works out to be about S$975.

This suggests a breakeven price of S$1,400 to S$1,500 per square foot, which according to some experts is slightly too pricey, compared to similar projects in the area.

“The asking price is a bit too high, a more realistic figure is about 20 per cent lower,” said Mr Nicholas Mak, executive director of research and consultancy at SLP International.

“For such a massive land size, I don’t think there will be more than five bids. The bids may also come with conditions attached such as a clause to hedge the amount of development charge it is liable for,” he added.

Laguna Park is located along Marine Parade Road and has a land area of around 678,000 square feet.

It is zoned for residential use at a plot ratio of 2.8, potentially able to yield about 1,600 units at 1,200 square feet each.

Laguna Park currently comprises 516 residential apartments and 12 commercial units, ranging from 1,453 square feet to 3,390 square feet.

Knight Frank believes the site is attractive because it has unblocked sea views spanning 300 metres and a clear city skyline.

Source : Channel NewsAsia – 5 Jul 2011

The Myth, The Hoodwink, & The Reality

The JLLS lady said a very true thing yesterday when she said that developers are not content with 10% profit. It is a myth; the minimum percentage that is factored into the residual valuation,  the actual profit margin can be much higher, even obscenely higher. 

The whole point of a proper residual valuation is to have an honest base on which to work from. If it turns out that the actual Net Site Value is very high then it is for the OWNERS to decide whether or not to dangle a carrot at the developers in the form of a discount. It is not for others to slice and dice the figures on their own accord. It is not their land.

The game has become more sophisticated this second time round, the MA has a smaller fig leaf to hide behind, and we are subjected to a new range of tactics. Yesterday, we were presented with never-seen-before-but-please-take-a-quick-look-before-you-pass-it-around laminated pictures/data of a would-be development on our TC site... oh, and by the way, do not take any photos of it .....   This MA thinks we are goondus.

Why? Why would a MA be bothered about how a make-believe development will look like? What business is it of the Sellers (us) to concern ourselves with how the Buyers intend to divide up their GFA? We do not care if they build 2000 shoe boxes or 20 mansions.

I will tell what I think; I think it was a feeble attempt to justify why they took 15% off the GFA, why they rate efficiency at 85% and not 95%. Whilst others ogled the picture I quickly jotted down the data underneath. I did not have enough time, but that was the whole point of producing this article out of the blue, so that people would NOT have time to study and scrutinize it too deeply. The SC had better demand a copy immediately as it was not in the original proposal but presented to owners on the day. They must get a copy for record purposes, before it disappears..

% PERMISSABLE GFA

Balcony: 10%

PES: 1%

A/C: 2%

Circulation: 9%

Other GFA: 4%

Let us, as amateurs, look at each one in turn, using the link for the  URA Handbook on Gross Floor Area.  How did they arrive at 85% GFA? Were they correct in doing so?

Balconies:

So, it is (GFA) + (10%  Bonus GFA)

PES (Private Enclosed Space):

Found under 'Items not counted as gross floor area'.

 So, even though PES is not GFA deductable, they deducted it from the GFA anyway.
Now we have (99% GFA) + (10%  Bonus GFA)

A/C (I am assuming this stands for A/C ledges):

 So, even though A/C is not deductable from the GFA, they dedusted it anyway.
Now we have (97% GFA ) + (10%  Bonus GFA)

CIRCULATION: 

I assume this is for all those other GFA items. 

It is worth noting here that water tanks, bin centre, PUB switch room/ cable chambers, general car parks, driveways, drop-off points, the first main entrance, letterboxes, covered linkways, skybridges, M&E spaces, rooftop pavilions, planterboxes (facing outwards), pump rooms, refuse chutes (hollow chamber), shadow areas (this one is interesting....a developer can increase the saleable GFA by building weird shaped buildings), shadow area of columns (another cracker!), first floor landscaped areas, lushly landscaped sky terraces, swimming pool, tennis courts  do not use GFA.

Common things that use GFA are:  guard house, lift motor room, refuse chamber (the bottom), staircases (design dependent), void decks, 2nd/3rd+ main  entrances , service ducts, lift shaft or lift lobby (which ever is smaller), walls and columns.

Now, please, 9% for this  list of items? 177,000 sqft for these? How enormous will the guard house/lifts or lift lobbies be? New mass market developments do not allow for void decks aka HDB. Even in house refuse chutes are becoming rarities.  From the $32k formal valuation and JLLS proposal, 5% for 'circulation' is quite ample. A smart architect can work around these exemptions to the developer's best advantage.

So, now we have (88% GFA) + (10% Bonus GFA)

Other GFA:

Unbelievably there is still yet an 'other' undefined GFA!!  What 'other' is there left?

So we have a final count: (84% GFA) + (10%  Bonus GFA) 

Disingenuously paraded as a round  95% GFA

Are they right?  I don't know, but there is a big question mark over their assumptions. My query rises out of how the valuations at the STB in 2008 were treated by the experts. At no point did the experts question  the 95 + 10% and 100 + 10% GFA efficiency - it did not raise an eyebrow and so, in my opinion,  must have been considered normal.

It is my guess that high-end condos in posh locations probably do not utilize all the GFA and instead have more open space and greenery to make the place feel exclusive and luxurious. But lets get real here, TC will be a low end mass market condominium surrounded by HDB. The developer will most likely maximize every square inch of GFA- every inch means more money in his pocket.  Just look at the 4 estates crammmmmmmed onto ex-Waterfront View to get a more realistic idea of any future development .

The Sale Committee did well when they requested to have the residual valuation breakdown from our newly elected MA. Faced with their proposal, they should now seek independent  advice on the following:

Question 1:

What is the 'usual' efficiency percentage in a suburban mass market project. Find out what it is in the Waterfront Collection etc

Question 2:

Do you or do you not add in the 10% Bonus GFA when calculating for the Gross Development Value ( the gross sales proceeds received by the developer before any costs are deducted).

2 formal Residual Valuations, and 1 informal Residual Valuation said YES

1 informal Residual Valuation said NO

Logically the answer should be yes, as there is a construction cost/financing cost/ DC for balcony etc  to the 10% GFA Bonus. If these deductions are reflected in the calculations, but the Bonus GFA is not reflected in the GDV,  .....well, then owners are not being shown the full figures.

Meet the Professionals

The EGM to select the en bloc lawyer and marketing agent was held today.

Marketing Agent with 61% of the vote

TEAM ERA

En bloc lawyer with 75% of the vote

RHT Law Advocates and Solicitors

When it came to choosing the lawyer, the SPs showed uncommon common sense by voting against their pocket.  RHT has the breadth of experience and the depth of manpower required of an estate as large as ours. $250 signing fee is not a lot of money. The rival candidate, whilst young and eager, ought to try and cut his teeth on something smaller and less thorny than Tampines Court. I wish him luck.

It was a closer call with the marketing agents but in the end people voted for the higher RP. 

Did they vote well? We shall see.

The men in blue - so named for their dashing navy blue jackets - did not give as good a presentation as their rival, whipped out completely irrelevant plans for a make-believe development at our site, had a lower the GFA and still people voted for them.

I will thrash out the reasons why I think  85% GFA is shortchanging our estate in my next post.

I would like to say something about how the EGMs are being played out. The EGM is the only time an owner can ask questions, not just for their own edification, but for the sake of others, too. The presentations went on for far too long and not enough time was given for Q&A. Indeed, the general feel from the floor was that people who ask questions are making a nuisance of themselves. It seemed all very rushed. If the time has to be extended by 1 hour, then extend it, these are our homes we are discussing, not maintenance matters. I was quite annoyed there was no standing microphone yesterday as it meant owners who put up their hands could be ignored.

The CSA is the next big one - and owners will definitely want at least 2 hours of Q & A.

SC Meeting: 25 Jun 2011

SC Meeting no 5 Minutes can be found  here

En Bloc lawyer presentation

Candidate no. 2

July Media

Market watchers expect lower tender bids for GLS - CNA  27 Jul 2011
What a difference a month makes - 22 Jul 2011

Lets take a closer look at the numbers - 8 Jul 2011
Will history repeat itself? - 8 Jul 2011
Singapore's property market looks good, says analyst - CNA 7 Jul 2011
Laguna Park's 2nd en bloc sale offer closes - CNA 6 Jul 2011
Daisy Apartments up for en bloc sale - CNA 5 Jul 2011

Including an estimated development charge of S$744,000 for the 10 per cent bonus gross floor area for balconies, the land rate reflects approximately S$727 per square foot per plot ratio.

DBSS land sales halted - CNA 4 Jul 2011

Some expect developers, especially those in the mass market sector, to gain because of spillover demand from home buyers who would otherwise purchase a DBSS flat.

MND confirms it is reviewing HDB’s DBSS - CNA 4 Jul 2011 
Grand Tower up for en bloc sale - CNA 4 Jul 2011

SC Meeting: 18 Jun 2011

SC Meeting no 4 Minutes can be found here

En Bloc lawyer presentation

Candidate No. 1
A rookie en bloc law firm with no prior experience.

At this point, I believe owners might know more about the process than they do as en bloc is definitely a process that has to be experienced first hand - it cannot be known by reading the Schedules alone.

Honey, I shrunk Tampines Court

The best part about going through an en bloc a second time round is the amount of information you have accumulated from the first.  Our previous en bloc lawyer and MA furnished a wealth of information at the Strata Titles Board - information you couldn't drag from them with wild horses had there not been serious objections.

It is highly uncommon for the Valuer or MA to reveal their computations unless they are legally bound to (ie before a court of law). The Valuers have to sign affidavits.  So it is with these two FORMAL, INDEPENDENT and COSTLY residual valuations from round 1 that I can compare with the two INFORMAL and FREE valuations proffered by the MAs in round 2.

Now, I know that prices have risen and costs have changed since the first round - what has not changed are the base figures, the constants that underline the whole complicated calculation. Tampines Court has not gotten any smaller, it has not changed it's plot ratio and the URA still offers the 10% GFA bonus on top of the potential GFA.

The valuations/proposals have about the same proposed GFA

Round 1 Formal  Valuations   

Saleable Area: over 2 million sqft (2,162,640 sqft & 2,064,336 sqft to be exact.  

Efficiency:  

Majority valuer: 110% GFA (including Bonus GFA)

Minority Valuer: 105% GFA (including Bonus GFA)

Round 2 MA proposals (no specifics, just approximations):

Net Floor Area,  - around 1, 867, 000+ sqft.  

Efficiency: 

MA 1:  95% GFA  (excluding  Bonus GFA)*

MA 2:  95% GFA  (including Bonus GFA)

* this was the chosen Marketing agent!!!!

This 10-15% haircut makes a big difference.

I would like to have an explanation. What basis is there for chopping off up to nearly  300,000sqft? 

Click on following link for the:

URA HANDBOOK  ON GROSS FLOOR AREA

 BONUS GROSS FLOOR AREA (GFA) ABOVE MP ALLOWABLE INTENSITY

4    URA grants bonus GFA incentives to encourage the provision of specific building features or uses. Essentially, the GFA of the incentivised features are allowed above the MP GPR control. These bonus GFA incentives are given to help realize various planning objectives for the city. For example, the balcony scheme encourages skyrise greenery while the lighting incentive scheme helps to enhance our city's image and highlight the distinctive Singapore skyline.

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The 10% bonus GFA incentive schemes are listed below:

• Green Mark Incentive Scheme 
• Balcony
• Rooftop ORA Community
• Community / Sports Facilities (for commercial properties)
• Underground Pedestrian Linkages to MRT (a bit far for TC....)
• Conserved Bungalow 
• Lighting Incentive Scheme (for CBD and Marina Centre)
• Art Incentive Scheme (central area)
• Orchard UD features 

Click here for:  URA Circular



At the end of the day, setting the RP should be done using a formal, independent Valuation.  Because owners were denied conferring 'powers, duties or functions' on the sale committee at the first EGM, they were not directed to do a formal valuation. That should have been their first order of the day. It's a challenging task to raise the necessary money ($30k) but nothing is impossible. If 32 minority owners could fork out this large sum in round 1, surely hundreds of would-be majority owners can do the same in round 2? Don't look around and see what your fellow neighbours are doing, just go ahead and do it. It's the right and proper thing to do.

If 40% of owners voted for the collective sale at the EGM 1, then they should donate $150 each to the cause. 

High profit margins for DBSS developers

Developers can earn gross profit margins of up to 76 percent from the public housing projects they develop under the Design, Build and Sell Scheme (DBSS), according to a Business Times report.

In the report, five out of the seven DBSS projects launched since 2008 have achieved gross profit margins of at least 28 percent.

This is similar to the 30 to 40 percent gross profit margins that real estate groups earn when developing private mass-market projects.

In some cases, however, DBSS margins were even higher.

Sim Lian Group, for example, can make a gross profit margin of approximately 76 percent from its recently launched Centrale 8 in Tampines — even after revealing that prices are now lower than previously announced.

Hoi Hup Sunway generated the highest gross profit for its 1,203-unit The Peak @ Toa Payoh, generating some S$257 million in total.

Using a generous construction cost estimate of S$200 psf ppr, the report included the land and building costs in computing the total development cost of each project, to determine the breakeven price. Industry watchers noted that construction costs could be as low as S$160 psf ppr, in some cases.

“I am surprised that the margins are so high,” said Ku Swee Yong, Chief Executive at International Property Advisor.

“All the more reason for us to re-examine the raison d’etre for DBSS in view of the need for a massive supply of affordable flats to satisfy the past five years of pent-up demand.”

Ha! I told you the  the professed 10% gross profit margin was all poppycock;  it is so obvious from the hard data I've been collecting under 'Developers Windfall'.  They know how to get the most out of the GFA - there are a thousand ways to do it.