Serial collective sale: Millionaires

Feb 18, 2007

3 deals in 2 years have made him $2.5m richer

Serial collective sale: Millionaires

Cashing in on the collective sale fever, these men have made a sizeable profit from sales of their properties

By Melissa Sim

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MR TEH HOPES TO STRIKE 'collective gold' with his other two buys - a $530,000 acquisition at Himiko Court in the Mount Sinai area, which he is standing in front of, and a Pearl Bank flat in Outram, which he bought for $500,000. -- BRYAN VAN DER BEEK

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TIDY PROFIT NO. 1: In 2002, Mr Teh sunk about $630,000 in a flat in Faber Hills in the West Coast area. The 96-unit estate was sold for $85.5 million in April 2004.

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TIDY PROFIT NO. 2: Mr Teh bought a unit in Eastern Mansion off Meyer Road for below $500,000 in 1998. The 168 units were sold in September 2005 for $153 million.

PEST control businessman Simon Teh, 49, is what is known in property circles as a serial 'en bloc-er'.

Three times, he has bought apartments and joined up with his neighbours to do a collective sale of their property.

And that is within two years. His investments have made him between $2.5 million and $3 million richer – and totally debt free.

Now he is sitting tight on two more properties which he believes will be snapped up by land-hungry developers in collective sales.

'Of course, I was very happy when the first collective sale happened. I don't believe in splurging, but I ploughed it back into other properties,' said Mr Teh.

Not to live in.

Not for rental income.

But for the hefty premiums that an apartment which is part of a collective deal can rake in.

Last year, a record 70 collective sale transactions amounting to $8.09 billion were chalked up, according to figures from CB Richard Ellis (CBRE).

This far surpasses the $1.99 billion for the 36 transactions in 2005, and the last high of $2.33 billion in 1999.

The sales were buoyed by record property prices, which have spurred developers to compete with each other to acquire more land.

Riding on the collective fever are people like Mr Teh, aggressive investors who speculate in properties with potential to be sold en bloc.

Of serial en bloc-ers, CBRE's Mr Jeremy Lake said: 'Often, if they have been through the exercise, it breeds confidence. The more times they do it, the more money they get and the more enthusiastic they become.'

Mr Teh, who lives in a three-storey terrace house in the Changi area with his wife and two children, admits that he scouts only for properties with collective sale potential.

Generally, he looks for properties on large plots of land, which give developers space to redevelop more units, and high plot ratios.

He is helped by his line of work, which brings him in contact with contractors and developers who give him an idea of how the market is moving.

Mr Teh first bought an apartment in Eastern Mansion off Meyer Road for below $500,000 in 1998 when the collective sale fever was heating up. That property was not sold during the 1999 surge so Mr Teh held on and rented it out.

In 2002, before the collective sale craze started up again, he sank about $630,000 in a flat in Faber Hills in the West Coast area.

In 2004, after clinching the deal for Faber Hills, he put another $800,000, into a unit in Maryland Park in Katong, which he again identified as a property with collective sale potential.

The estate had 218 units spread over an area of 246,738 sq ft.

First to go was the 96-unit Faber Hills for $85.5 million in April 2004. Then 11 months later, the 218 owners of Maryland Park received $236.5 million.

And finally, the 168 units at Eastern Mansion were sold in September 2005 for $153 million.

Mr Teh declined to reveal the exact amount he received from each sale, and is crossing his fingers that his other two buys will be similar coups.

He paid about $530,000 for an apartment in Himiko Court in the Mount Sinai area and about $500,000 for a Pearl Bank flat in Outram. He reckons their central location would be a draw for developers.

Himiko Court is a 177-unit freehold condominium that sits on 195,000 sq ft of land while Pearl Bank, is an ageing 99-year leasehold property touted as having collective sale potential.

Credo Real Estate managing director Karamjit Singh said about $1.9 billion worth of collective sales have been made in the first six weeks of this year. He reckons that 2007 has a reasonably good chance of surpassing last year's record.

But even though he has been spot on with his buys, Mr Teh is not ready to give up his pest control business.

'Being in this line, I'm in touch with the ground and it helps my property investments,' said Mr Teh.

'Besides, I'm very hands on and don't like to sit around and relax. If I retire, I'd be bored to death.'

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'Of course, I was very happy when the first collective sale happened. I don't believe in splurging, but I ploughed it back into other properties.'
- MR TEH