Collective-sale fervour returning

http://www.straitstimes.com/Invest/S...ry_487412.html

Feb 7, 2010

Collective-sale fervour returning

More estates forming committees to start or re-start process

By Joyce Teo


Last Wednesday, Credo Real Estate sealed the first collective sale of the year.

Four owners of a Balestier industrial plot benefited when they sold their Jalan Ampas site - which can be converted into residential use - for $27.5 million.

More such deals are likely to be inked this year, after a dry year when just one collective sale was done. That was Block 18 of Dragon Mansion, completed in early December.

But the success rate will depend a lot on the market and owners' expectations, consultants said.

Already, property consultants say many owners are again placing their hopes on hitting the collective-sale jackpot, in line with the improved property market and brighter economic outlook.

'More estates are now forming sales committees to either start the sale process or re-start the process for those that had not been transacted successfully previously,' said CKS Property Consultants' investment manager Chia Mein Mein.

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

'But prime land is another story. They still have quite a lot of it.'

Credo Real Estate's deputy managing director Tan Hong Boon said: 'We should see more activities towards the end of this year as many owners are keen to start the collective-sale process now.'

With more inquiries coming in, property consultants are busy pitching for jobs.

Many keen estates are those that had tried to sell en bloc but failed in the previous peak in 2007, the consultants said.

These include Pender Court off West Coast Highway, Royalville in Bukit Timah and Hawaii Tower in Meyer Road.

Collective-sale launches so far this year include the 11-unit Holland Hill Lodge, which was put up for sale en bloc last month at an indicative price range of $15 million to $16 million, or $1,038 to $1,107 per sq ft per plot ratio.

More launches can be expected from the second quarter, said Mr Tan.

A total of 116 collective sales were done at the peak of the property boom of 2007.

This figure slipped to only eight in 2008 amid the global financial crisis.

This year, there will certainly be more sales, consultants predict. However, some owners of prime or mid-end projects continue to hope for prices that are above the previous peak, they said.

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.

'There's still a great mismatch in prices. Developers are quite cautious,' he said.

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Business Times - 12 Feb 2010

Collective sales set to take off again

As many as 50 :scared-4: :scared-4: :scared-4: :scared-4: :scared-4: of them may be launched this year but deals may take longer under revised rules and rising price expectations

By KALPANA RASHIWALA

(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.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

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WIN-WIN SITUATION

With another round of en blocs coming up, property prices are sure to shoot up like crazy again like in 2007.

The en blockers, after getting their money, will be so flooded with cash that they will go around chasing up every property in town. :D

You must help the en blockers by first chasing up every property in town, so that the valuations of the en blocs will be higher, so that the en blockers will have more money when they get their pay out, so that they can chase up your property even higher!

This is called a WIN-WIN situation. :cheers1:

LOSE-LOSE SITUATION

Don't let another Goldman Sisters event scare the shit out of you. :tsk-tsk:

When you are scared, the market falls, the en blocs cannot go through. :simmering:

We already know that whether it is Lehman Brothers or Goldman Sisters, the governments all over the world will come to your rescue. Obama and Grandpa Wen will crank up their money printing machines.

They will only make the men in the streets suffer. Not you, :tsk-tsk: because as a property investor or specuvestor, you are on the same side as Goldman Sisters and gang, who are all well protected by the powers that be. Your properties will instead shoot up (just like in 2009).

Only the innocent Layman Brothers will suffer, not the guilty Lehman Brothers. That's how the world works. :D

Only the innocent (read stupid) people who diligently saved their money in the bank (as taught in primary schools to be frugal) will see their savings deposits disappear.

“The problem with fiat money is that it rewards the minority that can handle money, but fools the generation that has worked and saved money.”
- Adam Smith (16 June 1723 – 17 July 1790)

A good example of someone who can handle money is Mr. A. M. Mootiah Chitty. In 1920, his $8200 bought him a 7,275 sf house at Shanghai Road. Today, $8200 can buy him 6.5 sf at Shanghai One (only standing space).

The secret of how to "handle money" is to get rid of money and buy properties. :scared-4:
- jlrx (joined April 2008)

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“The modern banking process manufactures currency out of nothing.”.
- Lord Josiah Stamp, Former Director of the Bank of England (21 June 1880 - 16 April 1941)

“At the end fiat money returns to its inner value—zero.”
- Voltaire (21 November 1694 – 30 May 1778)