Complete Property Market Updates of Singapore

August 7, 2008

En bloc blues? There’s hope, says support group

Filed under: Collective Sale,General — Propertymarketupdates @ 3:34 am

WE REFER to the report, ‘En bloc sales bring out the worst in Singaporeans’ (June 1) by Ms Jessica Cheam.

We are a group of concerned friends who love Singapore and the estates in which we live. While we welcome progress, we also cherish the old and familiar.

Our cityscape has improved enormously in the past decades, thanks to the vision of Singaporeans and its leaders.

But for our communities to forge together in good-neighbourliness, roots to grow deeper and future generations to see Singapore as home, we need to preserve our homes. We need to retain the kampung spirit that binds us.

The recent spate of attempts in en bloc sales have impacted us in a way that is counter-productive to our nesting instincts and identity as a gracious society.

We need to stop perpetuating these negative experiences. We want to be free from the constant worry of losing our homes to those who see them as mere financial tools for increasing wealth.

In this spirit of proud home ownership and community living, we have formed an online community called Hope for Stayers ( where we share our experiences and educate others on the whole process of an en bloc sale.

As ’stayers’, we hope that we can contribute to the ethos and values needed to enable Singapore to evolve into a truly first-class progressive nation, where the term ‘prosperity’ reflects more than dollars and cents.

Lastly, we agree with Ms Cheam’s view that it would be prudent to consider a requirement for an 80 or 90 per cent quorum for an extraordinary general meeting to decide whether to push for en bloc sale. This is consistent with the current 80 or 90 per cent requirement for an en bloc sale to succeed.

This would establish whether an estate has such support from the very outset. The current system of 30 per cent quorum encourages a possible abuse of MCST funds in repeated and wasteful attempts at the en bloc ‘lottery’ and results in the depletion of funds meant primarily to maintain the estate.

We also hope that the entire en bloc sale process is tightened in such a way that it reflects and acknowledges the need for fair play and the deep-rooted sentiment that we have for our homes.

Dai Qiujin (This letter carries 12 other names)

Source : Straits Times – 12 Jun 2008


July 8, 2008

Four en bloc sites back on market with lower tags

Filed under: Collective Sale,General,Land Sale — Propertymarketupdates @ 4:40 am

Cavenagh Gardens, Novena Hill, Seletar Garden, Hong Thye offered in Q4 2007

FOUR collective sale sites are back on the market, with price expectations much lower than when they were offered in Q4 last year. Cavenagh Gardens, Novena Hill, Seletar Garden and Hong Thye are for sale after attracting weak bids the last time round.

The freehold Cavenagh Gardens near the Istana could fetch $450-$455 million or $1,671 to $1,689 per sq ft per plot ratio (psf ppr). This is 27 per cent lower than the expected price of $619 million or $2,308 psf ppr last October.

The buyer may be able to alienate adjoining parcels of state land for a further $10 million. If approved, the combined site would have a potential gross floor area (GFA) of 310,649 sq ft, bringing the price down to $1,481 to $1,497 psf ppr.

The site could yield 155 units with an expected breakeven cost of $1,915 psf and an expected selling price of $2,200 psf.

If the authorities allow redevelopment with a plot ratio equivalent to the development baseline of 3.24, the site’s potential GFA could increase to 479,287 sq ft.

Riding on the back of redevelopment plans for Paya Lebar Central under Draft Master Plan 2008, Hong Thye at Lorong 39 Geylang is also up for sale again. The freehold site could fetch $12-$13 million, which translates to $359 to $385 psf ppr including an estimated $1.9 million development charge (DC).

With a potential GFA of 38,702 sq ft, the site could house 40 units with an expected breakeven cost of $709 to $735 psf, and an expected selling price of $780 to $809 psf.

Last October, the site was up for sale at $15-$17 million or $438 to $489 psf ppr including DC.

The expected price for a freehold residential site at Novena Hill is $42-$45 million or $1,170 to $1,254 psf ppr. The site, with a potential GFA of 35,885 sq ft, could yield 40 boutique apartments. The site was up for sale last October at $56-$60 million.

The last site, Seletar Garden in Yio Chu Kang Road, is an estate in perpetuity. Located near the Seletar Aerospace Park, the mixed-development site could fetch $50-$55 million or $488 to $537 psf ppr. The expected price was $70-$75 million last September.

There is also the possibility of alienating three parcels of adjoining state land at an estimated additional cost of $7.9 million. The combined site would have a potential GFA of 132,219 sq ft, lowering the price to $438 to $476 psf ppr.

Propnex is marketing the four sites. According to its head of investment sales Charles Chua, although the property market is relatively quiet, ‘we do believe that there are pockets of pent-up demand’.

Source : Business Times – 5 Jun 2008

4 sites relaunched for collective sale at lower prices

Filed under: Collective Sale,General — Propertymarketupdates @ 4:37 am

PropNex hopes 30% cut in asking price will attract buyers, as demand is ’still there’

A BOLD property firm is defying market trends with a renewed bid to sell four housing sites en bloc, even though the market appears dead for now.

PropNex Realty admits its move is ‘contrarian’ but hopes a hefty asking price cut of up to 30 per cent will attract buyers.

Even then, developers may not bite, given market uncertainties, property consultants say.

Some other sites were relaunched for collective sale this year, but none was sold. Any bids that did emerge were below the owners’ expectations.

PropNex is relaunching four sites: Cavenagh Gardens in Cavenagh Road, Novena Hill in the Novena area, Seletar Gardens along Yio Chu Kang Road and Hong Thye in Geylang.

‘We are trying to take a contrarian view,’ said the firm’s head of investment sales and commercial department, Mr Charles Chua. ‘We believe the demand is still there. Someone has to take the lead and kick-start the market.’

The four estates were first launched for sale around September and October last year. Their owners had since lowered their expectations, but not their reserve prices. This was the minimum sale price fixed when the owners first agreed to a collective sale.

In the case of the 130,000 sq ft Cavenagh Gardens, the asking price is now $450 million to $455 million, well down from $619 million in October.

Mr Chua hopes the prospect of combining the freehold site with an adjoining piece of state land will be an added attraction.

That will lower the price to as little as $1,481 per sq ft per plot ratio (psf ppr). Last year, the price was $2,308 psf ppr, excluding the state land. A developer could then sell the new units at about $2,200 psf, said Mr Chua.

Seletar Gardens is also heavily discounted now. The asking price is $50 million to $55 million from $75 million last year.

The asking price at Novena Hill is now at $42 million to $45 million, down from up to $60 million last year.

And the price tag on the Geylang plot has had about $3 million lopped off and is now going for up to $13 million.

However, even if the sellers have lowered their pricing expectations, there are other issues to consider, observers say.

‘It depends on how reasonable the seller’s price is. It is quite meaningless to lower just the asking prices and not the reserve,’ said a market observer. ‘If developers were interested in buying below the asking prices, they would already have asked for it.’

Most developers already have some projects on their books, so they may not be keen, said Mr Colin Tan, Chesterton International’s head of research and consultancy.

‘The issue is the construction bottleneck,’ he said. ‘For new sites, they have to consider rising construction costs, in addition to the risk of a declining market.’

Mr Karamjit Singh, the managing director of Credo Real Estate, which has handled a significant amount of collective sales, said developers would need a greater profit margin in the event selling prices soften even further.

Source : Sraits Times – 5 Jun 2008

July 3, 2008

Developers turn landlords as property market stays quiet

Filed under: Collective Sale,Developer News,General — Propertymarketupdates @ 3:18 am

With projects held back, firms lease out units bought in collective sales

PROPERTY developers such as Koh Brothers and GuocoLand, which bought collective sale sites during boom times, are now becoming landlords as they wait out the market slowdown.

They are leasing out apartments they bought to existing occupants as a way to generate some income instead of simply leaving them vacant.

If the property upswing had continued, these developers might well have moved quickly to tear down the older homes to put up new developments.

But the sharp slowdown in home sales has put paid to such thoughts for now.

Market observers say renting is a nimble move given present market conditions.

For sellers of units in collective deals who have yet to buy a new home, it is a win- win situation as they would have collected their sale proceeds.

Take, for example, the consortium that bought freehold Lincoln Lodge for $243 million in June last year.

It has decided to allow occupants to keep renting homes for six months from the sale completion date of July 8, and thereafter on a monthly extension basis.

‘Upon requests by some of the sellers to stay on, and while waiting for approvals, we have decided to grant them this request by extending a lease,’ said Mr Francis Koh, Koh Brothers’ managing director and chief executive.

Rents at Lincoln Lodge range from $2,700 to about $4,500 for larger units.

In the middle of last year, at the height of the collective sale frenzy, Koh Brothers bought the Newton site with Heeton Holdings, KSH Holdings and Lian Beng Group for a record $1,449.30 per sq ft (psf) per plot ratio.

A Lincoln Lodge seller, who wished to be known only as Mr Tan, welcomed the rental move as sellers had collected sale proceeds in January, and those who had not bought a home could take their time.

‘It’s an option…I know someone who negotiated the rent down to $2,500,’ he said.

GuocoLand seems to be the early rental front runner.

It offered residents short-term leases at Sophia Court in Adis Road last year, followed by Leedon Heights off Holland Road earlier this year. The leases started in March at Sophia Court and yesterday at Leedon Heights. Both last till Jan 31 next year.

A three-bedroom unit at Leedon Heights costs $2,850 a month, while rents at Sophia Court range from $800 to more than $4,000 a month.

GuocoLand bought Leedon Heights in April last year for $835 million and Sophia Court in late 2006 for $230 million.

Renting out units is a way to ‘wait out the current quiet in the market’, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.’

Frasers Centrepoint said it may offer short-term leases to the former owners of the 185-unit Flamingo Valley, a freehold site in Siglap Road that it bought for $194 million in February last year.

‘We had 50 owners who wrote to ask us to extend their lease…They haven’t found anything suitable,’ said the firm’s general manager of development and property, Mr Cheang Kok Kheong.

He said the firm was likely to extend a lease of six months to a year. This would ‘give us more time to think about our plans’.

City Developments (CDL) has said it is still exploring the renting option.

Renting out apartments bought in collective sales is not new. CDL did so a few years back, when it rented out all 124 apartments in Kim Lin Mansion in Grange Road.

It had bought it in late 1999 for $251 million, or $996 psf of potential built-up area, but pushed it out for sale only at the height of the property boom last year. It fetched prices of $3,600 psf.

Win-win deal

·  Developers lease out units to generate income instead of leaving them empty as they sit out the market slowdown.

·  Sellers of collective sale projects who have yet to buy new homes can stay on in their existing units as tenants.


‘If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.’ – MR MAK of Knight Frank, on companies holding out for better prices

Source : Straits Times – 4 Jun 2008

July 1, 2008

Tuan Sing seeks stake in Katong Mall

Filed under: Collective Sale,Commercial,General — Propertymarketupdates @ 3:51 am

TUAN Sing Holdings, which is looking to divest its hotel assets, is seeking a stake in Katong Mall, which was put up for collective sale last week.

In a statement released over the weekend, Tuan Sing said that it is looking to dispose of $107 million in loans it had extended to its associate Gul Technologies Singapore (Gul Tech) through an asset swap with the controlling shareholders of Tuan Sing for certain strata units in Katong Mall.

The asset swap will involve 129 strata shop units at Katong Mall with an aggregate purchase consideration of about $63.1 million. This was arrived at based on the aggregate value of the properties of $130.1 million, representing 70 per cent of the open market value of Katong Mall, but less outstanding borrowings of $66 million and rental deposits and advance rental of about $1 million, which will be retained by the vendors.

The purchase consideration will be satisfied by Tuan Sing and certain of its subsidiaries novating the Gul Tech loans in favour of the vendors of the Katong Mall units, which are companies under the controlling shareholders of Tuan Sing. This is subject to a $44 million loan waiver by the controlling shareholders.

Tuan Sing said that the proposed assets swap would be beneficial as it allows the company to secure a ‘realistic and tangible recovery of the loans, albeit that Tuan Sing would have to recognise a partial write-down of the loans’.

It will also transform Gul Tech’s equity from a negative to a positive net asset position with the controlling shareholders waiving about $44 million of the loans.

Tuan Sing said that it had already made provisions for the loans in prior years, and estimated that the net effect of the partial writedown on equity is about $0.7 million.

The company also said that it planned to dispose of its 50 per cent held hotel assets worth about A$615 million (S$799 million) to third parties as and when opportunities arise.

Tuan Sing will hold two separate extraordinary general meetings on June 16, 2008, to seek shareholders’ mandate for the two transactions.

Source : Business Times – 2 Jun 2008

En bloc sales bring out the worst in Singaporeans

Filed under: Collective Sale,General,Regulators — Propertymarketupdates @ 3:15 am

After a most spectacular year for the en bloc market last year, sales activity has finally frizzled out and for most parties involved, it is a welcome time-out. While property agents may lament the slowdown, one group of home-owners can heave a sigh of relief, as the threat of being forced to sell their homes retreats into oblivion.

Well, for most, anyway.

The recent debacle at the annual general meetings of two of the most iconic condominiums on the East Coast – Bayshore Park and Mandarin Gardens – proves that while the market has gone dead, en bloc woes have not, and will not, go away.

Some points of contention that arose at the meetings were the use of proxy votes to influence decisions, and conflicts of interest arising over the roles of management councils and sales committees.

In the course of my job, I have covered my fair share of en bloc deals, and as a non-partisan observer of proceedings, I have come to one conclusion about the ‘uniquely Singapore’ phenomenon that is the en bloc.

It is ugly. And it brings out the worst in Singaporeans.

Recent developments have also highlighted weaknesses in the law regarding collective sales and a private property owner’s rights. This is despite the tightening of en bloc rules that kicked in last October, which ensure, among other things, that sales committees are properly elected, and collective sales agreements witnessed by lawyers.

This has no doubt cooled the en bloc fever which gripped the nation last year, with a total of 116 collective sales generating record investment sales of $13.64billion.

But some glaring flaws in the en bloc process remain. They include the distribution of sale proceeds, the role of the management council versus the sales committee, and the use of proxy votes at annual and extraordinary meetings.

Let me elaborate.

Firstly, owners should be compensated according to their flat attributes – height, cost of renovation, view.

I have found that pro-en bloc types usually own low-floor units, with average furnishings and view. Anti-en bloc types, by contrast, typically own beautifully renovated top-floor units with stunning views – it is no wonder that these owners want more compensation or refuse to sell, according to how much they have invested in their homes.

Current laws favour the average owner, who receives a pay-out equal to that of his top-floor neighbour, which is obviously unfair and has been the root of many conflicts and arguments.

The Strata Titles Board (STB) has also previously ruled that renovations, along with interest, are not a ‘deductible expense’, which means your renovations count for nothing in a collective sale.

To create a level playing field, provision should be made so that owners get fair value for their homes, perhaps by a government-appointed independent valuer.

Secondly, the management council and sales committee should be kept separate by law, since the role of the former is to maintain the upkeep of the estate, while the other’s role is to sell it.

Current laws allow a sales committee member to be on the management council as well, but this has caused unhappiness at many estates – not just at Bayshore and Mandarin – where suspicion breeds among residents towards those who carry both positions.

On the issue of proxy votes, it is theoretically democratic. But it also allows decisions to be skewed one way, because residents who want certain things changed will attend meetings and get proxies from similar-minded neighbours to achieve the results they desire.

Meetings currently require only 30per cent of the total share value held by residents of an estate to attend, which enables decisions to be made without majority consent.

This should be looked at. One solution could be to raise the minimum requirement of residents present to 80per cent, or instead to do away with proxy votes altogether so that voting cannot be manipulated – perhaps via an online or e-mail voting system.

My advice in the meantime?

Don’t buy into a strata-titled property if you do not want to be forced to sell your home. Current laws do not ensure you will be able to live in your condominium unit until your dying days – even though, in my opinion, you should be able to.

Most countries in the world allow this basic right, why can’t we?

Perhaps the lawmakers could take some of these issues into consideration when compiling the next set of refinements.

Beyond the economic value of urban rejuvenation or boosting shareholder value for property developers, the en bloc phenomenon has ripped apart the moral fibres and harmony of our society.

Is this a cost our society is willing to pay?

On the one hand, I can sympathise with those who want to sell: they may be approaching retirement, or perhaps have plans to move away, and want to get the best price.

But there are people who have spent hundreds of thousands of dollars beautifying their homes to be their retirement nests, plus those who value the environment they live in beyond any amount of realisable value.

Do the former have the right to determine if the latter lose their homes? Owners still have a choice to sell their homes on the open market.

In terms of ’specuvestors’ who swoop in to snap up units in the hope of making a quick collective sale buck, their motivation is even more inexcusable. It is okay to want to make money, but do it without hurting someone else.

It’s not just Singaporeans who become embroiled in controversial sales, but also foreigners and permanent residents.

I just hope that my estate never has to go through this nightmare. It is sure to do permanent damage to relationships which have taken years to build up, but which take only a sale notice to destroy.

Source : Sunday Times – 1 Jun 2008

June 24, 2008

Katong Mall on sale for up to $250m – amid controversy

Filed under: Collective Sale,Commercial,General — Propertymarketupdates @ 2:48 am

Public tender comes after a contentious collective sale approval last year

ONE of the landmarks of the east, Katong Mall, was put up for sale yesterday at an indicative price of $220 million to $250 million – amid some controversy.

The 99-year leasehold property comprises strata-titled commercial units used as shops and other businesses.

But the site can be rebuilt into a mixed development comprising residential and commercial units, said its marketing agent Jones Lang LaSalle (JLL).

Its public tender comes after a contentious collective sale approval process in September last year.

About 35 minority owners claimed they were not consulted in the drawing up of the sale agreement, and that the sale process was conducted under the old rules and not the new, stricter ones that took effect in October.

They also complained of a low reserve price, and said some majority owners had a potential conflict of interest as they were property developers – Nustavino and Habitat Properties – that could bid for the property.

Whether the consent of owners representing 80 per cent of the share value required for the sale had been obtained was also called into question yesterday.

One minority owner, Mr Robert Ong, told The Straits Times that five owners had withdrawn their signatures before the new laws kicked in on Oct 4.

‘This means the signatures collected could have fallen below the 80 per cent threshold,’ he said.

When contacted, JLL’s local director for investments, Ms Stella Hoh, said that the firm had the 80 per cent level to proceed with the sale.

On the conflict of interest issue, she said that even if the sale committee members were developers by trade, they were legally allowed to bid as long as they declared their position.

They would not take part in the tender decision-making and voting process, she added.

‘We believe this site will attract a lot of parties despite the current market, given that there are few private land sites for sale in this area.’

The four-storey mall has a land area of 78,158 sq ft with a gross plot ratio of 3.6. This works out to a gross floor area of 281,369 sq ft – an indicative sale price of $782 per sq ft (psf) to $888 psf per plot ratio.

Developers have an extra option: JLL said it has also obtained outline planning permission for a mixed development with an approved plot ratio of three – a gross floor area of up to 234,474 sq ft. This is subject to the relevant authorities’ approval and payment of a development charge.

Located at the junction of East Coast Road and Joo Chiat Road, the project could yield about 490 commercial units of 400 sq ft each, or 100 residential homes and 185 commercial units of 1,200 sq ft and 400 sq ft, respectively.

Savills Singapore director (business development) Ku Swee Yong said the site was an attractive location, with an increasing population catchment with upcoming condominiums nearby.

‘But given the current market, it remains to be seen whether there will be takers.’

Meanwhile, all eyes will be on the results of the public tender, which closes at 3pm on June 25.

Source : Straits Times – 27 May 2008

Katong Mall up for sale with $220m-$250m tag

Filed under: Collective Sale,Commercial,General — Propertymarketupdates @ 2:46 am

KATONG Mall has been put up for collective sale at the indicative price of $220 million to $250 million.

Katong Mall: The 78,158 sq ft site could yield up to 100 residential and 185 commercial/retail units

The 78,158 sq ft site is zoned for commercial use and has a plot ratio of up to 3.6.

According to marketing agent Jones Lang LaSalle (JLL), the strata-titled 258-unit mall can be redeveloped into a commercial or retail project with a gross floor area (GFA) of up to 281,369 sq ft, subject to official approval and payment of development charge if applicable.

Based on this GFA, the unit land price works out to be between $782 and $888 per sq ft per plot ratio (psf ppr).

JLL local director (investments) Stella Hoh estimates the site could yield up to some 490 commercial/ retail units of an average size of 400 sq ft.

Ms Hoh also said outline planning permission has been obtained for a mixed residential and commercial development, with an approved plot ratio of up to 3.

This translates to a GFA of up to 234,474 sq ft, subject to official approval and payment of development charge if applicable, and could yield up to 100 residential and 185 commercial/retail units of average sizes of 1,200 sq ft and 400 sq ft respectively.

‘This scheme would appeal to developers who are looking to capitalise on the demand for residential units in the established Marine Parade enclave,’ Ms Hoh said.

In September 2007 it was reported that a majority owner held 72 per cent of Katong Mall, with the rest divided among about 100 owners. It was also reported that some minority owners were unhappy about a collective sale.

But Ms Hoh reiterated that 80 per cent approval for the collective sale has been received.

Source : Business Times – 27 May 2008

June 11, 2008

Proxy votes in Mandarin Garden

Filed under: Collective Sale,General — Propertymarketupdates @ 3:36 am

We wish to point out contradictions in Mr Tan Kok Khoon’s letter, ‘Mandarin Gardens en-bloc sale – committee not involved in AGM” (May 9).
According to Mr Tan, the Mandarin Gardens Collective Sales Committee (CSC) ‘was not involved in the proceedings of the annual general meeting on April 27′, but the facts speak otherwise.

Official records show that 200 owners attended the AGM, of whom 93 attended in person and 107 attended by proxy. Of the proxies, 69 were held by two CSC members, one of whom was Mr Tan himself who held 55 proxies.

Yet, Mr Tan says in his letter: ‘We certainly did not organise any collection of proxies’, suggesting this large concentration of proxies in the hands of two CSC members came by without organisation and effort, which is hard to believe.

Mr Tan also said in his letter: ‘One of our (CSC) members present at the AGM declared that none of us would stand for election to the council.’ In fact, a resolution to prevent CSC members from being management council members and vice versa, was soundly defeated by 67 per cent of the votes. Clearly, the CSC did not approve of this resolution and used its proxies to vote against it.

Finally, two CSC members tabled a resolution to bar the management council from spending more than $50,000 on urgent matters. This controversial resolution was passed by a 61 per cent majority, obviously with the help of proxy votes held by CSC members.

It is evident to us who attended the AGM, the longest ever recorded at Mandarin Gardens, that CSC members influenced the proceedings and determined the outcome of the AGM.

K. Kuladeva, Dennis Butler and Jeannette Aruldoss (Ms)

Source : Straits Times – 19 May 2008

May 12, 2008

Committee not involved in AGM

Filed under: Collective Sale,Community Voices,General — Propertymarketupdates @ 3:55 am

PLEASE refer to Monday’s article, ‘En-bloc uproar at Bayshore Park, Mandarin Gardens’ by Ms Jessica Cheam, and the letter by Mr Augustine Cheah, ‘En-bloc system needs relook, as Bayshore shows’.

The Mandarin Gardens collective sale committee would like to clarify that it was not involved in the proceedings of the annual general meeting on April 27.

However, we know of members who attended as legal owners or subsidiary proprietors. One of our members present at the AGM declared that none of us would stand for election to the council.

We certainly did not organise any collection of proxies, although some subsidiary proprietors may have approached committee members in their capacity as neighbours.

Tan Kok Khoon

Source : Stratits Times – 9 May 2008

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