You need a PHD to understand CPF

From The Online Citizen

DB: Cannot withdraw cash profits anymore when you sell?

By Leong Sze Hian

I refer to the report “Govt to explore ways to increase use of CPF for buying HDB flats” (Channel News Asia, Mar 27).

One possible implication or policy change may be this: cash profits from the sale of HDB flats may have to be kept in one’s CPF account, and cannot be cashed out.

The possible implications of such a change may be as follows:-

- HDB prices may crash when people realise that no cash profits can be made

- Home buyers may prefer private property compared to HDB flats

- Those who subscribed to the asset enhancement policy may find that they have put all their eggs into one basket (HDB), and can no longer be monetised before retirement

Will HDB flat-owners only be able to monetise their HDB flat at age 55, 65?

What portion of the cash profits from the sale of HDB flats will be locked up in the CPF?  All? 50 per cent?  Will interest that would otherwise have been earned from the cash utilised be allowed to be cashed out?

At the current rate of increase of $15,500 per annum for the CPF Minimum Sum and Medisave Required Amount, the total at age 55 is projected to be $197,000, $352,000 and $507,000, in 2013, 2023 and 2033 respectively.

So, if you sell your HDB flat, but have less than $352,000 when you turn 55 in 2023, does it mean that you can only draw $5,000 at age 55 (unless you have property to pledge for up to half the Minimum Sum), with the balance payable as a monthly life annuity from age 65 under the CPF Life scheme?

Five things to note

With the recent CPF changes and the expected changes, there are 5 things that you may need to know before you turn 55.

ONE:

Upon reaching 55, if your CPF Special Account (SA) plus property pledge, is insufficient to meet your CPF Minimum Sum (MS), which is currently $117,000, your CPF Ordinary Account (OA) balance will be transferred to your CPF Retirement Account (RA) to make-up for the MS shortfall.

What this means is that you may no longer be able to use your OA balance to pay for your home mortgage.

So, if you are affected by this policy, use your entire OA balance to re-pay your mortgage before you turn 55.

TWO:

If you plan to downgrade to a smaller flat, the sales proceeds (CPF utilised and accrued interest) of your flat will also be transferred to your RA, if you have a MS shortfall.

What this means is that after setting aside the MS, you may have less available from your flat sale proceeds to pay for your smaller downgrade flat.

So, if you want to downgrade, do it before 55.

THREE:

Upon reaching 55, your OA and SA that is transferred to your RA to meet the MS, can no longer be invested.

So, if you want to invest your OA and SA, do it before 55. (note: first $20,000 of OA and $40,000 of SA cannot be invested.)

FOUR:

For those age 55 and younger from 2013 onwards, CPF Life will be compulsory.

So, if you plan to migrate, give up your Singapore citizenship, and want to withdraw your entire CPF as a lump sum, you should try to do so before 55.

Otherwise, only the surrender value of your CPF Life (depending on which of the 4 plans you choose) may be given to you. If you plan to migrate, choose the CPF Life Basic plan as it gives  the lowest monthly annuity payout with the highest residue value.

FIVE:

When the OA is transferred to the RA to meet the MS at age 55, the OA also can no longer be used to pay for one’s own or children’s tertiary education fees.
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Also from The Online Citizen

CPF – F1 or F9? Half also cannot withdraw anymore

Horizon Towers

Horizon Towers lawsuit set to go on

Market news

Pender Court up for sale again with $100m price tag

This is the estate whose en bloc fell through because the buyer pulled out of the deal - and the owners got to keep the deposit; a cool $250k each. Now they are relaunching at  much higher price.

Collective sales market stays cool

 According to HSR investment sales assistant executive director Jeffrey Goh, many home owners are not keen to reduce asking prices and are in no hurry to sell. They have seen how well new property launches have done and this has ‘given them a lot of excitement’, he said.

But Credo Real Estate managing director Karamjit Singh believes that Mayfair Gardens and Green Lodge are ‘not necessarily representative of the fate of en blocs to come’.

For properties where sufficient consent from owners was obtained some time back, asking prices may not be in line with market conditions, he said.

‘But we are about to see a new wave of en bloc launches by tender in the months ahead, and these will be projects that would have got started end of last year or early this year.’

Are En bloc owners finally becoming shrewder after gaining some common sense? If big and small developers require their land banks to be replenished, they won't always be satisfied with Government plots in out-of-way locations. The owners should hold out and wait for buyers to come a-begging .
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En bloc owners should take a leaf out of the Government's book when it comes to assessing tender bids.  Owners are amateurs at the game and have been told that -"The true value of your property is what the market is willing to pay". It is not necessarily so. The true value of your home  is measured by calculable facts and figures, not by opportunists hoping to get it on the cheap. I say watch out for opportunistic bidding and developers pushing en bloc owners to the wall. Be careful of property agents; their long term interest lies with the buyer rather than the owners  (and who knows what juicy  bonus they get from the Big Boys if they manage to hook the estate and deliver it on a plate to them). 
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There have been two successful  government land sales (GLS) recently in Tampines and in Ten Mile Junction. The Gov did not sell at the first tender, the price offered simply was too low for their liking. They can wait. Owners can wait, too. An interesting little tussle in the media ensued between the Government and the president of the Real Estate Developers’ Association of Singapore (Redas) Simon Cheong, about setting the property market free (from gov intervention) and about who is to blame for rising prices. Really, as if it were that simple. Speculation, kiasuism, government charges, land prices,  building costs, developer greed, money laundering (I suspect) - all play their part. 
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Tampines site gets top bid of $302m

Govt rebuts Cheong’s ‘free market’ theory

A single bid for a Tampines site was rejected in June 2008 for being too low, but was awarded in March at $421 per sq ft per plot ratio (psf ppr) – some 3.6 times higher.
A Ten Mile Junction mixed-use site also had a failed bid of $162 psf ppr in April 2008, but went for $437 psf ppr in February – 2.7 times higher.

"the Government was not convinced that the bids represented fair market value rather than opportunistic bids, as there were very few bids for the sites, and the bids were exceptionally low".

It was the "Government's duty as the custodian of state land to ensure it obtains a fair market price for a site", it added. 

Gung-ho resident

I am NOT THE AUTHOR of the above flyer!  I do not need the expense of printing out 560 flyers nor do I have the time to drop them onto 560 doorsteps! That's what my blog is for; free and easy.

The author doesn't sound like an agent - and believes owners should be more gung-ho about selling their units at comparable HUDC prices. He's right, but we are getting there very slowly. I predict $800k will be breached by mid year. $900k by year end if prices continue to rise. 

Our units are worth $800 psf at least ($1.36m).

Why? Because that is what a similar replacement unit would cost in the area.

Don't forget, any developer will take the present strata title area to (ie present gross floor area of 1million sqft ) - and double it to approx. 2 million sqft (potential gross floor area). And after that they will sell for $800 - 1000 psf. 

At the very least, an enbloc price should realise the full potential of your stake in TC. After all, that is what RELEASING THE VALUE is about - releasing it for YOU and NOT  to the developer only. 1700 sqft enbloc price is $1.36 to $1.7 million.The developer is still left with 1 million sqft to sell. 

So, at $419 psf we are still way, way below our true value. 

Don't get me wrong, I am not advocating another en bloc - I would quite happily live here for the rest of my days. The estate's repainting and repair works are nearing their end (mid-April) and the MC will be proposing and presenting other works to increase the value of the estate and for owner's enjoyment at the next AGM.

Market news

Sim Lian’s $302m bid is tops for Tampines site

Tampines site gets top bid of $302m

Heartland Condos at S1k psf or more?

‘The psf price is one thing, the quantum is another. As long as the total quantum is at $1 million or less, buyers can still afford to buy.’

Units will thus become smaller to keep the quantum affordable, he added.

Snuffboxes with million dollar price tags! Nutcase buyers happy with postage stamp properties and greedy developers pushing the limits to maximise profit.

The Pariah

The Pariah's 'must read' new post (requires reading stamina with attention to details)

http://www.singaporeenbloc.blogspot.com/

Pronounced  par-I -ah and not PAR-iah
 

CULFORD GARDEN

Credo Real Estate launches collective sale of Culford Garden at Siglap
ChannelNewsAsia - 17 Mar 2010
Siglap Condo makes en bloc pitch
Straits Times-18 Mar 2010
Two East Coast en bloc sites on market
Business Times-18 Mar 2010

Culford Gardens is a freehold condominium development located at 175A, Upper East Coast Road (S)455277 in District 15 near Bedok MRT station. Completed in 1983, it comprises 24 units. It is located in the vicinity of Emmanuel Assembly of God and Singtel Power House.

Condo Amenities near Culford Gardens

Culford Gardens is located just minutes drive away from Parkway Parade Shopping Centre, where a host of amenities are readily available, such as retail outlets, supermarkets, restaurants and eating establishments, banks, cinemas and other entertainment facilities.
There are schools located in the vicinity, such as Temasek Junior College and Chai Chee Secondary. Recreational facilities nearby include the Telok Kurau Park and East Coast Park which is just a short drive away.
For vehicle owners, travelling to the business hub from Culford Gardens takes just above 15 minutes, via Upper East Coast Road.

Development Name:	Culford Garden
Property Type:	Condominium
Developer:	CULFORD DEVELOPMENT PTE LTD
Tenure:	Freehold
Construction Year:	1983
# of Floors:	4
# of Units:	24

Horizon Towers never ending story

Horizon Towers are given the go-ahead to go to High Court over costs.
Business Times article here
Straits Times article here

"The latest legal tussle involving Horizon Towers looks set to go into full swing, with the High Court having dismissed the action by the two defendants to strike out the lawsuits filed against them.

This means the court will hear the claims brought by three sets of minority owners against the two former sales committee members – unless the defendants succeed in appealing against yesterday’s decision.

BT understands that the first defendant – former sales committee chairman, Arjun Samtani – will appeal the High Court decision, while the second defendant, Tan Kah Gee, is still deliberating if he should appeal.

The High Court yesterday also ordered both Mr Samtani and Mr Tan to jointly bear the costs of the striking-out application and the court hearing – amounting to a total of $6,000.

The minority owners are suing the two former sales committee members to reclaim close to $1 million in legal and administrative costs which they say they incurred during the lengthy fight to keep their homes."

Lushhomemedia

My most favoured link site - Lushhomemedia- is discontinuing publishing articles from Straits Times & Business Times with effect from April 2010. This website has been brilliant up to now and I will sorely miss it when it downsizes (or disappears altogether).  I am hoping past articles will remain on the site.It was a perfect one-stop portal for all things happening in Singapore regarding en bloc, legal matters, Government policy changes, market news etc.

I have time, though, to save past important articles and will figure out a way to keep them on-line and linked to my site. As for future articles of interest, I shall use Condosingapore or Property websites as links.

Neptune Court

So the 2 -in-1 idea of combining privatisation and en bloc together did not gel. Privatisation must be achieved before moving on to step 2.

There is no time frame for this - owners can expect to be hounded for as long as it takes. I have no idea what the sentiment on the ground is like, but with only half of the owners attending the AGM it seems likely people are not too interested in estate matters at the moment. Or maybe, they have already made up their minds one way or the other.

Of course, SIGNING for privatisation and PAYING for it are entirely different matters. An owner is not obliged to pay up immediately; case in point - Tampines Court has owners who, to this day, have not yet paid their privatisation costs to the HDB. They incur a 6% interest rate on the outstanding amount. So, in Neptune Court, it is possible some diligent owners will pay up whilst others may hang back and sign separate deals with a future sales committee/PA/Buyer to cover this outstanding 'expense'. From my past analysis, I believe Tampines Court had owners in Enbloc Round 1 masking their outstanding privatisation arrears as MC debt for others to pay! Sheesh - the trickery of it all.

So, who knows what's happening behind the scenes at Neptune Court. The instigators are always one step ahead of the posse.

One take-away from this episode is how quickly a Government Ministry/Statutory Board can change tack when it is in the way of a greater national agenda (ie the agenda being the destruction of old 'sprawling' estates peopled by average Singaporeans to make way for higher density developments for others). If the Ministry of Finance can lop off $104 million (70%) from their original demand literally overnight - then what's stopping the URA from following suit to lower the cost of the differential premium (the top up to 99 yrs for leasehold) in years to come. A precedent has been set.

After all, if there should come a time when there's an impasse between the Owners, the Buyer and URA - and the stumbling block is a whopping differential premium - then it may well be a case of who blinks first.

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From Waterfront View/Neptune Court we now have:

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1) A CPF Board willing to facilitate en bloc by letting the LTSA en bloc statute undermine it's mission in safeguarding CPF retirement savings by waiving the need to replenish fully a CPF member's account in an en bloc sale. CPF loss is not considered financial loss - so if you have used CPF money to pay for your mortgage then beware.

Has CPF lost it mission?

CPF Loss

2) the MOF willing to facilitate en bloc by discounting 70% off it's privatisation cost.

If the URA are really sincere about wanting urban renewal at all costs - then let them make the next sacrifice; 70% off the DP is a good start, don't you think?

Neptune Court & their Enbloc Lawyer

Neptune Court’s residents approve appointment of lawyer

Residents of Neptune Court voted on Sunday to appoint law firm Tan & Au to undertake the privatisation of the sprawling estate.

Sunday’s meeting to amend the constitution, appoint a law firm and approve the privatisation committee lasted three hours amid heated outbursts from some residents.

One complaint was the alleged lack of transparency in how the Neptune Court Owners’ Association (NCOA) had gone about its plans.

“They claim there was an open tender in selecting a law firm, but none of us knew about it and it was done without our consent,” said a long-term resident who did not want to be named.

But addressing the meeting, NCOA’s president Tommy Wong, said: “We selected (Tan & Au) for their talent, experience and capability for detail such that owners will not suffer any financial loss … and their terms of no success, no payment.”

While the previous committee had consulted the law firm some two years ago, this is the first time the NCOA has moved to appoint it.

Some 250 residents, representing fewer than half of the 752 units, turned up for the meeting. In all, 205 residents voted to appoint Tan & Au while 20 objected.

The privatisation committee was endorsed with a majority vote of 146.

There is still some way to go before privatisation becomes reality, with the agreement of 75 per cent of all the owners needed. For now, the Neptune Court Privatisation Committee (NCPC) together with its lawyers plan to meet the Ministry of Finance – which owns the land – and Singapore Land Authority to negotiate a better privatisation fee, said NCPC’s chairman David Ho.

In 2007, the residents were quoted a fee of S$144 million to privatise the 99-year leasehold estate, but in June last year were given a new figure of just S$40 million, which worked out to roughly S$50,000 per unit.

Just down the road, the 480-unit Lagoon View estate last year was quoted an estimated S$12 million, or S$28,000 a unit.

Retired civil servant Yahya Aljaru, 69, and retired manager, Mr Fadzakir Fadzlil, 67, both of whom have resided at Neptune Court since 1975, are looking forward to privatisation and a likely en bloc sale effort thereafter.

“I will take it if they make me an offer I can’t refuse,” said Mr Fadzakir.

“I have simple needs. I don’t need a swimming pool, a snooker room. I will use the proceeds to go travelling and leave some for the kids.”

Channel NewsAsia – 8 Feb 2010

Size DOES matter

Condos hit a sweet spot even without a tennis court

Business Times - 6 Feb 2010

New homes going for as much as $2,600 per square foot can offer designer furnishings and place you in a coveted district, but they may no longer come with large common spaces or even tennis courts traditionally associated with a private address.

Nowadays, ‘you don’t really get developments with sprawling grounds, where there’s openness’, observes DTZ executive director Ong Choon Fah. ‘Those are actually more difficult to come by.’

As it becomes harder to find prime projects offering large ground spaces and complete facilities, existing developments with these features are likely to stand out. ‘One of the reasons why Ardmore Park is so popular is because it has a beautiful landscaped garden, and the grounds are sprawling. You don’t get many of these, these days,’ says DTZ’s Mrs Ong

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So luxury homes now have next-to-no facilities... and probably a clear view of their neighbour's bedroom, too. I have seen windows mere spitting distance apart. No privacy, no wind, no light. Some luxury condominiums in the city don't even have a parking space for each unit.

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Tampines Court may not have the facilities - but that does not mean it can't aspire to have them. We have plenty of space - enough for a swimming pool and 3 tennis courts, we even have a section labelled 'wilderness' by the MC where there's nothing but trees. But I don't think a swimming pool is possible with the make up of our residents. They have rejected it twice before at AGMs so it is probably a non-starter. Nevermind, Tampines Courters should understand they have the luxury of space - and learn to appreciate it. In fact, not having a swimming pool keeps our costs down and the monthly maintenance fee very reasonable - on par with HDB actually. We can carve a niche out for ourselves in simpler ways - landscaping and a gym perhaps. Very soon, when all the big estates have gone the way of the dodo - Tampines Court will come into it's own. Families with children, maids and mother-in-laws in tow can't squeeze into these modern glass shoe boxes and anyone who visits our sleepy estate will think they've hit the jackpot. Permanent Residents, soon to be partially-locked out of the HDB resale market if you believe the newspaper reports, will have no choice but to turn to estates such as ours - lower-end private estates in convenient locations. Even without facilities, we can command ever increasingly higher prices - and don't believe the nay-sayers when they say our value will drop.

Hopefully, after the repainting, retiling and new letterboxes etc, owners will want to plonk down another $100k on landscaping to make TC the Ardmore Park of the east! I am going to push for this at the next AGM. Plants, we want lots of beautiful tropical plants, please!

But remember; developers, flippers, desperado's and the government are all out to rob you of your paid-up 'luxury' estate..... (in case you have forgotten:- we are only 560 units in a site area of 702,162 sqft). I don't know when they will come round again, but they will.

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I said something along the same lines in a post 2 yrs ago here .

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Collective-sale fervour returning

Sunday Times - 7 Feb 2010

An industry observer pointed out that most developers are running out of land for mass market projects, so they are very keen to buy.

Now that resale prices are moving up, more people are worried that they cannot get a similar replacement property, explained a consultant who declined to be named.

Still, the problem is the gap between buyers and sellers’ expectations.
So, owners now understand it is about replacement and not mythical money in the bank (or all locked up in CPF). Nothing less than 1-for 1 exchange should be demanded.

Horizon Towers minority going for blood

Horizon Towers saga roars back to life with new lawsuit

Business Times – 26 Jan 2010

'According to documents filed with the High Court, these minority owners are looking to reclaim close to $1 million in legal and administrative costs which they say they’ve incurred during the lengthy fight to keep their homes.'

'They have served writs on former sales committee chairman Arjun Samtani and member Tan Kah Gee, alleging that they were ‘key players in the process leading up to the commencement, facilitation, management and finalisation of the collective sale process’.

The minorities, in their claim, allege that Mr Samtani and Mr Tan had ‘pushed for a quick sale of the property for their personal benefit’, because both had bought additional units in Horizon Towers, at the start of the collective sale process, and were keen to profit from that.'

Mr Samtani is represented by N Sreenivasan from Straits Law Practice. There's no finer counsel out there, so this SC member is well represented.

If the minority win; it would have a warning effect on anyone contemplating joining/starting a sale committee to further their own agenda. If buying up second units at the start of an en bloc does not throw a cloud of suspicion on a member's true motives, then I don't know what does. It may have happened in the past, before the Court of Appeals recommendation of full disclosure of second units etc at AGMs, but that should not absolve them from having impure motivation. Integrity does not need legislation, it is simply expected and if these minority owners can show that the two SC members acted in their own best interests only, then they have a chance at winning. 

Horizon Towers defendant moves to strike out suit

Business Times – 27 Jan 2010

Collective sales revving up

En bloc sales will likely roar in Tiger year

The managing director of Credo (Mr. Singh I believe) trying to drum up business for himself again, dishing out the same old tired reasons for putting your home on the en bloc market in the false hope of striking it rich. The oracle of en bloc predicts it is time for a new feeding frenzy and estates should line themselves up at the trough.

Well, there are two ways of looking at the en bloc market - one from the buyers point of view and the other from the sellers.

Each typical property market cycle can be sub-divided into four – by dividing each of the upswings and downswings into two.
When the market begins to move up, in the first quarter of the property market cycle, land prices move up the fastest as developers tend to do most of their land acquisitions then. That is when the en bloc sales fever reaches its peak, as in the 1995/96, 1999/2000 and 2006/07 periods.

Yes, we remember the 2007/08 peak, how could we forget? Tampines Court was one of the very few lucky ones to be snatched from the en bloc jaws at the last moment (quite literally) but sadly saw its sister HUDC estates gobbled up and their owners spat out (I'm thinking of Gillman Heights in particular and the shabby treatment owners got from the developer afterward).
The buyer acquires land at the beginning of a cycle knowing that he can double/triple/quadruple his profit in the second/third quarter of the cycle. Owners will be told to rush in now and sell... or miss the wave.... And it is precisely in this period that owners in suitable projects should act decisively to seize their en bloc chance. So owners should act quickly if they want to seize the opportunity to lock themselves in to selling low and buying high before the cycle has had a chance to complete. Yes, sell low, buy high or halve the size of your home and do it now!
What this wily old property agent doesn't tell you is the flip side for the sellers; that it is only in the second quarter of the 'cycle' that they will receive their sale proceeds in an escalating market which would have greatly diminished in buying power by then. Only those with second properties or holding power can wait to buy their new homes in the distant downturn, when perhaps they can purchase a reasonable property in a decent area. Most though will be stuck with smaller units in outlying areas, their nest eggs shrunk and their long years of hard work all for nothing. The frenzy of 2007 left many, many owners dismayed, devastated, shortchanged, angry, broken. Do not forget .
At this point, we understand that owners of as many as 50 projects have recently formally started their en bloc sales processes and are gearing up to hit the market sometime in the first half of this year, some as early as this month. They range from small to large projects and are located in all major residential districts.
There are a lot of amoral speculators out there with properties they are dying to get rid of, even if it is only for a small profit. They show no compunction whatsoever in driving en blocs in estates, gathering the 20% and hammering away forever with their lies and half-truths.
Many more owners are likely to jump on the bandwagon, especially if the earlier ones prove successful.
There is nothing more frightening than the stupidity of the masses when they perceive themselves to be 'losing out'. It's almost as if they view the land beneath them as a block of ice, melting away, when in reality it is solid gold, in no danger of losing it's long term value (especially while the plot ratio is high).
If the projects are priced reasonably, we believe they should have a good chance of landing a buyer this year.
The only acceptable and 'reasonable' price should be based on what an owner can reasonably expect to pay in an uprising market 2 years down the line. Forget what the LTSA says or fails to say - it's REPLACEMENT value that is of the most concern for the genuine home owner/seller. A fair indication would be the cost of a new unit in the new development. Why sell a Mercedes and replace it with a Honda?

Reacting to the sharp upturn in mass market homes last year, the Government is releasing more land sites this year. Owners should note that these would compete for developers’ interest
Same old scaremongering tactics. Developers need land to develop - constantly - it's a fact of life so there's no need to panic. When times are lean the Government throws them sustenance food and they lap it up, but it's the land in the prime districts and developed estates they really want to sink their teeth into.

And do not to forget that no one can predict anything with certainty. Cycles are not on a nice, neat 4 year rotation, so don't give this Credo guy any credence; he is only out to sell anything he can get his hands on.
The 2006/2007 frenzy was an eye-opener to the many fault-lines and errors inherent in en bloc, both statutory and human. This property agent is hoping all will be forgotten, and owners will once again fall hook, line and sinker for these tired old inducements and rationalisations.
Sorry, but I didn't buy them then, and I don't buy them now.

Collective Sale fervour returning

 Sunday Times - 7 Feb 2010

Collective sales set to take off again

SINGAPORE) As many as 50 collective sales may be launched this year, though less than half of these could translate into actual deals before year-end, say property agents polled by BT.
A study by property consultant Credo Real Estate has listed a total of 34 possible properties that could be tendered for collective sale in 2010.
Eighteen of the 34 developments are either in District 10 or 15. 'These are among the larger high-density private residential districts that enjoy healthy demand for new homes and hence land for residential development,' says Credo's managing director Karamjit Singh.
Collective sales committees have been appointed for all the 34 developments in the list. Most have also appointed property consultants and lawyers. Some have begun signing a Collective Sale Agreement (CSA); however, a tender launch could well flow into next year, especially for larger estates.
Two of the 34 sites - Goodwill Mansion in Balestier and Holland Hill Lodge - have already been launched this year. Meanwhile, nearly half the developments on the list comprise fewer than 50 existing units each.
Agents say larger estates will take more time to be launch-ready as it takes longer to secure the minimum 80 per cent consent level from owners. It also requires several (usually three or four) extraordinary general meetings (EOGMs) before a site can be launched for sale under revised en bloc rules that kicked in from October 2007.
Mr Singh points out that even for an estate of say just 30 units, it could take about six months between the time owners requisition for their first EOGM and inking the sale to a developer. This used to take just three to four months before rules were amended.
Jones Lang LaSalle's head of investment sales Stella Hoh says: 'Small and mid-sized sites will form the bulk of new launches and actual deals up to, say, the third quarter of this year. Next year onwards, if the private residential market continues to be stable and sales volume picks up further, that will create more confidence for bigger en bloc sale sites to be launched.'
Colliers International executive director (investment sales) Ho Eng Joo reckons that projects in city fringe locations like Balestier, as well as East Coast and Changi areas, are more likely to succeed in en bloc sale efforts than those in the prime districts. 'Prices of end units (homes) in prime districts have not recovered to their 2007 peak, so it's harder for developers to cough up 2007 land prices that many owners expect.' In fringe locations, the price gap compared to 2007 has been much less.
Mr Singh suggests that it may be tough selling 99-year leasehold en bloc sites this year as developers can buy comparable plots under the Government Land Sales Programme. 'Likewise, prime sites very close to Orchard Road may also see a slow start as developers still have prime sites in their books, many of which were bought in 2006/2007.
'Where we expect to see greater levels of success would be (sites) in mass market and mid-prime locations which are realistically priced and offering unique selling points like being near to Sentosa, MRT stations, shopping centres and good schools,' he added.
Credo reckons about 30-50 sites could be launched this year, of which around 20 could be sold by end-2010. Knight Frank executive director Nicholas Wong forecasts 40-50 launches and 15-20 sales this year. JLL's Ms Hoh predicts that only 15-20 sites could be launched, of which 10 may be sold.
During the peak year of 2007, a total of 87 collective sale deals were sealed at a total of $11.6 billion. This fell to eight deals for a total $346.5 million in 2008 and just one deal at $100.8 million last year.
Owners looking to match or exceed 2007 prices could stand in the way of en bloc sales.
Savills Singapore's director of investment sales and prestige homes Steven Ming says that owners may expect higher premiums before they sign the CSA as prices could rise while they wait to collect their sales proceeds. 'It can easily take one and a half years from the point of obtaining the first signature to the time when owners receive full sales proceeds,' he said.
'Sellers, when they consider signing the CSA, look at how much premium they will get for their unit in an en bloc sale than if they were to sell it on an individual basis in the current market; as well as the future replacement cost for the property. Sellers seek a higher premium for fear of being priced out later if prices rise steeply.'
However, developers in their bids would be more mindful of changes in property cycles while they wait for Strata Title Board and possibly other court approvals before they can take possession of the site. 'The sudden market correction in late 2008 is still fresh on developers' minds,' Mr Ming notes.
Business Times - 12 Feb 2010

Green Lodge tender

Green Lodge tender receives 'a few' bids

THE tender for the collective sale of Green Lodge at Toh Tuck Road closed yesterday afternoon but it is not clear if a winner for the site has emerged.
BT understands that there were ‘a few’ bids for the freehold parcel, but marketing agent Newman & Goh was tight-lipped over the results of the tender. It is conducting due diligence and has imposed a blackout period in the meantime.
The 80-unit Green Lodge, spanning 151,075 sq ft with a plot ratio of 1.4, was put up for sale at end-December last year. The asking price stood at $135 million, and including a development charge of around $9.5 million, the price worked out to $683 per sq ft per plot ratio.
The winning developer would be able to launch a project with around 211 units measuring an average 1,000 sq ft.
A consultant estimated that the units could be sold at around $1,000-$1,100 psf, while Newman & Goh projected an average selling price of at least $1,250 psf.
In a report issued yesterday, analysts from Goldman Sachs expressed reservations over the return of collective sales activity for now. ‘Even though developers are financially stronger, we think they will choose to stay on the sidelines in the en bloc market until demand returns more visibly in 2H 2010,’ they said.
‘A good indication of potential trigger points for en blocs is the widening of primary over secondary market prices.’
Source : Business Times – 14 Jan 2010

Botanic Gardens View

Botanic Garden View battles on.

Dear fellow-owners,

As you will be aware, the Sales Committee has resurfaced with a new draft contract. To sum up our opinion of it, if you have read it carefully, you will see that signing it will deprive you of all rights against them in the event of malfeasance or negligence on their part, and will also bind you to accept whatever price they decide, no matter how low it is i.e. the reserve price might as well no longer exist for any effect that it will have.

The rest of the letter can be read on their blog here

Round 1 & 2 Enbloc journey

2005

Dec - Self-appointment of pro-tem En Bloc Committee

Dec - Informal valuation $389,719,233.00

2006

11 Feb - 1st Dialogue session

25 Feb - 2nd Dialogue session

19 April - Draft CSA and cover letter received by owners

14 May - CSA Dialogue session

05 May - First signing of CSA

15th/20th/21st/ 27th May 2006 - CSA signing

09 July - Dialogue session

15 July - CSA Dialogue session

29 July - Update by pro-tem committee tagged after the AGM

05 Aug - Dialogue Session

12 Aug - Dialogue session 
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NEVER SAW THE SC AGAIN UNTIL AFTER THE SALE>>>
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2007

21 January - purported 80% threshold reached

23 January - Press Release:- Sea Breeze apartments sold for $53.8 million
The Sea Breeze apartments on Joo Chiat Road have been sold for $53.76 million, which marketing consultant Jones Lang LaSalle (JLL) believes to be the highest price yet achieved in the area.
At the transacted price, the 56,376 sq ft site, which has a plot ratio of 2.1, sold for approximately $454 psf per plot ratio (ppr). There is no development charge payable, as a result of the high baseline.
Sea Breeze was sold to Grovehill Pte Ltd, whose directors are linked to the Tiong Aik Group whose last project was the 120-unit The Inspira at Arnasalam Chetty Road.
Sea Breeze can be redeveloped into an 88-unit condominium with a gross floor area of 118,391 sq ft.
JLL regional director and head of investments Lui Seng Fatt said that owners of the existing 56-unit apartments enjoyed a 50 per cent premium over current market prices.
The new development could be launched at an average price of between $850 and $900 psf, he said.
In another proposed deal, Tulip Garden, at the junction of Holland Road and Farrer Road, has been launched for collective sale through expressions of interest. The 20-year-old, 164-unit development is located on a 316,709 sq ft site with a plot ratio of 1.6.
Marketed by Savills Singapore, director Steven Ming said the indicative price guide is $900 psf ppr including development charge. This would give the site a price tag of about $456 million.
Based on the plot ratio, about 253 condo units of 2,000 sq ft in size, or 316 units of 1,600 sq ft, can be built. Mr Ming said almost 80 per cent of the residents have agreed on the proposed collective sale.
At the asking price of $456 million, the break even price is $1,250-$1,300 psf. The estimated launch price could be around $1,500.Mr Ming said average prices for recent launches nearby, like Ford @ Holland and Sixth Avenue Residences, are $1,200 psf and $1,100 psf respectively.
In Tampines, a 22-year-old former HUDC development, Tampines Court, has been put up for collective sale with an indicative value of $527 million, inclusive of development charges and differential premium of about $107 million.
It is marketed by Dennis Wee Group. Investment sales director Jimmy Teng said the 702,458 sq ft site has a plot ratio of 2.8 and a potential gross floor area of at least two million sq ft.
‘The successful developer could build about 1,700 units with an average size of 1,250 sq ft,’ he said, adding that developers also have the option to bid for one of the two subdivided parcels.
Source: The Business Times, 23 January 2007

27 January - Press Release:- Tampines Court up for en bloc sale (Weekend Today)

31 January - Announcement of tender in Straits Times

04 February - 80.00% - Statutory 8 week Notice

12 February - Press release:- Collective sale site in next wave may fetch around $1 billion each 

The record for collective sales in terms of absolute dollar price has been broken twice since the start of the year – Horizon Towers in January with $500 million, and Gillman Heights this month with $548 million.
But in the works are the next wave of collective sale sites about twice that quantum. These include The Claymore, a prime freehold site of about 246,000 sq ft at Claymore Hill, with a price tag said to be about $1.3 billion, and Farrer Court, a privatised HUDC estate, with a land area of 838,500 sq ft and an asking price believed to be about $900 million. Another large scale residential collective sale in the pipeline is Ridgewood Condominium in the Mt Sinai area, said to have an estimated price tag of over $900 million.
The $1.3 billion price being indicated for The Claymore reflects a unit land price of about $2,030 psf per plot ratio inclusive of an estimated $100 million development charge that its developer will have to pay to the state. This would set a new benchmark price for residential land in Singapore.
Apart from these jumbo collective sale sites, there are a slew of others that could be launched this year, although with slightly smaller price tags.This includes Tampines Court, with a $420 million indicative value, and several in the Farrer Rd area such as Leedon Heights (whose indicative price is said to be about $700 million) and Spanish Village (over $400 million). Tulip Garden was launched last month with an asking price of over $420 million.
The big question on many market watchers’ minds is whether there’ll be takers for so many big-ticket sites. Property agents are predictably sanguine.
‘There will be demand for big plots as increasingly you see developers teaming up with financial partners or funds from overseas. And these foreign players are looking for significant-sized acquisitions, otherwise they won’t bother spending resources studying the local market,’ says DTZ Debenham Tie Leung director Tang Wei Leng.
Agreeing, CB Richard Ellis executive director Jeremy Lake observes: ‘The deal size in terms of absolute dollar quantum is less of a hindrance than it might have been a couple of years ago, as there’s plenty of liquidity now. We see developers teaming up with other developers, or developers teaming up with financial partners, for large acquisitions.’
He acknowledges, however, that pricing is an issue. ‘Minimum pricing set by owners in terms of the unit land price (psf per plot ratio) for en bloc sales is being pushed into uncharted territory,’ he said.
But as residential project launches test fresh highs, the unit land prices being sought by some owners may not be completely far-fetched – although they seem high relative to previous benchmark prices for residential land, Mr Lake added.
An important factor that affects developers’ ability to raise prices of their high-end projects is supply in the location, note property players. And supply is one factor developers take into consideration when trying to decide whether or not to buy a collective sale site.
‘If you have just one large en bloc site in the vicinity but no new projects nearby, then the developer will find it easier to control the market and move up his selling prices. But when you have a few big ones in the same location, developers may be less enthusiastic about bidding for big en bloc sites in such micro-markets.’ One such example, say property watchers, is the Farrer Rd area.
However, Savills Singapore managing director Michael Ng, whose firm is marketing three sites including Tulip Garden and Spanish Village, is confident saying that the sites are in District 10, a prime district.
‘The area’s pull will become even stronger when the Farrer MRT Station (under Circle Line) opens,’ he said. ‘In fact, the area is just five minutes’ drive from the Grange Rd area where condo units are commanding $2,000 psf or even higher,’ he added.
Over at Tampines Court, marketing agent Dennis Wee and the appointed lawyer for the majority owners, Phang & Co, plan to make the huge, 702,162 sq ft leasehold site more digestible to prospective developers by dividing it into two smaller plots.
Developers will be invited to bid for one or both sites. The award will seek to maximise the overall sale price achieved for the two sites combined.
‘If one party submits the highest bid for one plot and another for the second plot, then both developers will have to jointly agree to buy the entire site as the two halves must be sold together,’ explains SK Phang, principal in the law firm.
After completion of the sale of the site, the developers would then partition the site into the two halves and each developer will become the sole owner of the half he has bid for.
As far as owners of the 560 units in the estate are concerned, their sale proceeds will be the average of their share value in the estate and the floor area of their unit – regardless of which subdivided plot their unit stands on.
Source: The Business Times, 12 February 2007

 

08 March - Close of Tender

25 March - Sold by private treaty

Purchase price: $395,000,000.00 + $10 million Beta Sum = $405 million

Dev. charge + Dif. Premium = $107 million

$260 psf of potential gross floor area. (pgfa) including developmental charges and differential premium.

*Average gross sale price per unit : ~$705K before adjusting for Alpha sums, deduction of costs and expenses etc
(as stated in property agent letter dated 27 March 2007) 
 

28 March - Press Release:- Tampines Court being sold for $405 million (Business Times)

28 March - Dialogue session

1-April - Dialogue session

21 April - Sale and Purchase presentation

31 March - 80.71% - Statutory 8 week Notice

03 May - Outline Planning Permission (OPP)

25 May - 81.6% - Statutory 8 week Notice

22 June - Upgrading to 99 yrs lease

30 June - Minority Dialogue session

19 July - 81.6% - Statutory 8 week Notice

21 July - EOGM

26 July - RPA in principle date of approval

28 July - AGM

12 Aug -

19, 20 August - Collection of disbursement fee ($781.25) from majority owners

5 September - Appointment of Valuer

12 September - 82.14% - Statutory 8 week Notice

06 November - 82.14% - Statutory 8 week Notice

27 December - Notice of application for Sale in 4 Newspapers

31 December - 82.14% - Statutory 8 week Notice 

2008

TAMPINES COURT CASE: STB 02/2008

07 January - Application for sale to the STB

18-22 January - minority objections filed

29 February - Day 1 minority mediation at the STB . Group of 39 legally represented, plus 4 single objectors with no legal representation.

10 April - Day 2 minority mediation

09 June - Day 3 minority mediation

16,17,18 June - STB Hearing. Group of 32 minority legally represented and 2 independent minority.

19 June - Buyer does not agree to amend the S&P Agreement (Beta Sum)

23 June - Interlocutory Application to Amend Application (in chambers).

Application withdrawn

27 June - Buyer not minded to agree to the extension of time (S&P)

30 June - Interlocutory Application to bring forward the date for the adjourned hearing

02 July - Minority objection to bring date forward

09 July - Arguments for and against presented

10 July - Further arguments added

11 July - Application dismissed by STB

16 July - majority apply to High Court to have the date of hearing brought forward : High Court originating Summons 941 2008/P

18 July - High Court Originating Summons 941 2008/P
Mir Hassan bin Abdul Rahman and Another v Attorney-General[2008] SGHC 147
Court allows date to be brought forward
21 July - STB Hearing day 4 and Majority Oral Submission
22 July - Minority Oral Submission
23 July - Written submission
24 July - Extra submissions?
25 July - STB dismissed the sale. Grounds for dismissal: lack of good faith in sale price and method of distribution.
25 July midnight- Qualifying Certificate expiration, Sales and purchase agreement expires.

The End of En bloc Round 1
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26 July - Annual AGM
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Aug - Aug 2009: general repairs to the estate. New car labels. New Access gate cards. Tree pruning and general landscaping works. New CCTV camera system at guard houses and side gates. Accounting problems solved.

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2009
Aug 2009 - Annual AGM. Repainting &  Repair works approved.

Oct 2009 - Repainting of estate, re-tiling of ground floor lift lobby, re-tiling of low-rise ground floor. New letterboxes, signage, dustbins, benches, replacement of corroded water pipes and other R&R works.

2010

April 2010: estate repainting and other R&R works completed.

Over 20% unit turnover since Aug 2008

Gathering of requisitions for a second attempt at a collective sale by a new owner in 2010

29 Nov - letter of requisition for EOGM from less than 20% of owners by share value to the Management Council

2011

10 Jan - Notice of EGM for the purpose of collective sale sent to all SPs with 29 Nov letter showing less than 20% by share value of SP's requisitioning.

24 Jan - Amended Notice of EOGM for the purpose of collective sale with new requisition letter dated 19 Dec 2010 with amended list of requisitionists

29 Jan  - EGM 1 for Collective Sale of Tampines Court

Quorum: 47% at 2.30pm

Number of SPs elected to the sale committee: 12 (6 new owners since 2009, 6 old owners)

One nominee refused to give full disclosure of her interests and that of her associates' interests in the estate. 

Itshometome later unearthed that this SC member had not disclosed :-

a) her co-mortgagee's second unit in the estate and 

b) her sister's holding of 2 units in the estate. 

Subsequent emails to the managing agent to void this member's nomination (in accordance with the Schedule) proved fruitless.

Letter dated Mar 24 to sale committee on the matter also proved fruitless.

Email to en bloc solicitor  went unanswered but was followed shortly by the resignation of the said SC member in Aug 2011 for 'personal reasons'. 

Time taken between EGM 1 and resignation of errant SC member: 7 months. So, no one actally 'voided' her nomination thereby proving that Paragraph (2) of the Third Schedule is bogus :

he shall, before his election, declare at the general meeting convened for such election, the nature and extent of all such conflicts of interest or potential conflicts of interest.
(2) The election of any person who fails to comply with sub-paragraph (1) shall be void.

26 Feb - SC Meeting
16 Apr - SC Meeting: 5 Marketing Agent presentations
03 May - SC Meeting: Shortlisting of Marketing Agents
23 May - Requisition letter to managing agent  for EGM 2
04 Jun -  Notice of EGM 2 sent to SPs (dated 4 Jun)
18 Jun -  SC Meeting: Legal presentation no.1
25 Jun -  SC Meeting: Legal presentation no.2
02 Jul -  EGM 2  for the purpose of collective sale (2-5.30pm)

Quorum: 30.71% (172 Units with share value 688) at 2.20pm

10 Aug - SC Meeting: Draft CSA
10 Aug - SC Meeting: Resignation of 2 SC members, amended CSA
20 Sep -  SC Meeting: EGM Agenda, Draft CSA, Reserve price, Recess Area
01 Oct -  SC Meeting: CSA discussion with lawyers and SPs
12 Nov - SC Meeting: no quorum:
19 Nov - SC Meeting: SC member resignation, letter of appointment of lawyer and MA, statement of income & expenditure of the SC, the RP, breakdown of En Bloc Fund, consider motion sent in by SP, finalisation of resolutions for EGM 3


DELETED MOST OF ENBLOC ROUND 2 BY MISTAKE!