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Thread: 'No en bloc, but please top up condo lease'

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    Default 'No en bloc, but please top up condo lease'

    http://www.straitstimes.com/News/Hom...ry_655042.html

    Apr 10, 2011

    'No en bloc, but please top up condo lease'

    Arcadia residents plan appeal after SLA rejects bid to extend lease of 33-year-old condominium

    By Jessica Cheam


    No en bloc, please, even if we're residents of one of Singapore's oldest condominiums.

    But we'd like a lease top-up.

    Residents at Arcadia, an early-generation condominium completed in 1983, feel so strongly about this that all have agreed to pay the cost of topping up the lease if the nod is given.

    Mr Anand Danani, 58, who has lived for more than 20 years at Arcadia, said residents are seeking a top-up to conserve the estate - which has 66 years left on its lease - and to preserve its value.

    Mr Danani, a private banker, said his family, like many others in the estate, has built precious memories and solid relationships with neighbours in this spacious estate nestled amid lush greenery in Arcadia Road. His daughter and son spent their formative years there.

    Ask him if he would want a collective sale - the choice of many residents of other leasehold condos here that have reached this age - and he would tell you without missing a beat: No way.

    The residents of the condo are seeking an extension of lease for their ageing estate, not for the sake of a collective sale but to conserve its three buildings on environmental and heritage grounds.

    If they succeed, Arcadia will set a precedent in Singapore's history.

    The condo's management committee told The Sunday Times it applied to the Singapore Land Authority (SLA) last year to top up the lease back to 99 years.

    This was after they worked hard to get the 100 per cent consent from residents, required by the authorities. But the application was recently rejected.

    The owners are all too aware that the condo is approaching the 60-year milestone left on its lease.

    In Singapore, private properties that fall below this level typically depreciate quicker in value as there is a smaller pool of interested buyers. Central Provident Fund (CPF) Board rules dictate that Singaporean and permanent resident (PR) CPF members cannot use their CPF savings to buy private homes with less than 60 years on the lease. Similarly, banks are reluctant to finance loans for buyers of such properties.

    Arcadia's management committee said that in its application to SLA, it stressed its intention to conserve the estate for its architectural value.

    The condo was the first building in Singapore to feature vertical landscaping, which was inspired by the Hanging Gardens of Babylon, one of the original seven wonders of the ancient world. It was built with generous garden terraces on every level and features unusual pyramid-shaped buildings that narrow towards the top.

    It was designed by local architect Chua Ka Seng of Chua Ka Seng & Partners Chartered Architects, who built in planter boxes of almost 12km in length throughout the buildings. The road it sits on, Arcadia Road, is a heritage road where trees are preserved and no development is allowed within a 10m-wide buffer.

    'Arcadia epitomises the green lifestyle that the Government is encouraging and we feel that this estate deserves to be conserved, rather than let it become vulnerable to en bloc sale, which leads to demolition and further wastage of resources,' said the condo council's treasurer Edwin Khew, 62, a former nominated MP.

    The Government has, in recent years, made efforts to 'green' buildings by providing incentives for owners to integrate greenery on their rooftops or walls.

    Arcadia was a pioneer in such vertical landscaping and was ahead of its time, say its residents.

    It was even featured - as 'one of the most dramatic green developments in Singapore' - in an exhibition 'Singapore 1:1 - Island, A Gallery of Architecture & Urban Design' by the Urban Redevelopment Authority (URA) in 2008.

    SLA had told the residents in a letter that 'we are unable to accede to your request at this point in time. The conditions for lease extension include land use intensification and urban rejuvenation'.

    When asked by The Sunday Times about its decision, a spokesman said: 'SLA declines to elaborate further because answering the questions asked would be a breach of confidentiality obligations.'

    SLA added that it 'evaluates each application on its merits and in consultation with the other government agencies'.

    'The specific circumstances of each development determine if a lease extension should be granted and, if so, the length of the extension.

    'For residential uses, the Government may allow lease extension if it results, for example, in land use intensification and mitigation of property decay,' it said.

    Arcadia residents are not giving up and intend to appeal against the decision. Mr Khew and Mr Danani are hoping Arcadia can set an example of how residents who look after their estate 'do not have to go through the wasteful process of en bloc sales'.

    Property experts such as Credo Real Estate managing director Karamjit Singh said it was rare for SLA to grant a lease top-up if it was not for redevelopment or for extensive refurbishment.

    Chesterton Suntec International research and consultancy director Colin Tan said: 'Topping up a lease on conservation and environmental grounds is untested... Planners generally like to keep their flexibility so they can rezone the land for other uses in the future if there's a need.'

    If the residents are all willing to pay the development charge to top up the lease, and show that the buildings will be kept in line with urban renewal, then there could be a case, added Mr Tan.

    If Arcadia does not get a lease top-up, it might then attract collective sale investors. It features large units, from 3,800 sq ft to 7,000 sq ft in size, that could potentially be redeveloped into smaller units.

    Resident Stewart Yen, who is in his early 60s and CEO of a security business, dreads such an outcome.

    'The buildings here have stood the test of time. We also have a diverse mix of people here who have gained many memories in this estate. We take pride in maintaining this as our home, and we want to keep it that way.'

    [email protected]

  2. #2
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    hrmm...looks like the govt is promoting MM units afterall...

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    URA rejected the lease top-up request because there is no optimize use of land if the land is not redeveloped. As such, owners of aging 99 leasehold developments must seriously consider to go en bloc at some point in time. Without en bloc, the aging development will continue to depreciate especially when the lease runs down to less than 60 years. It may not make any more sense to hang on to old leasehold developments.

    Wonder how owners of Mandarin Gardens (and other old leasehold developments) will response now given that the development is getting close to 40 years?

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    waste of resources leh. this project is such a beauty.

    Quote Originally Posted by azeoprop
    hrmm...looks like the govt is promoting MM units afterall...

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    not suprised. We looked into it for our old building, but all we got was a wall of "NO!"

    I had toyed with buying into this place at one point to stay, it's just to far out of town though......

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    Quote Originally Posted by EBD
    not suprised. We looked into it for our old building, but all we got was a wall of "NO!"

    I had toyed with buying into this place at one point to stay, it's just to far out of town though......
    In exchange for the serenity and quietness. Good to jog along there but not at night... too scary...

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    The risk of all 99LH property - top up not approved even if you're prepared to pay an arm and a leg to top it up. These guys are smart, once the property hit 40 years old, the top up premium increases exponentially (and lease depreciation) and their potential net enbloc proceeds (when that happens) will be greatly compromised. So they decide to bite the bullet and to up earlier, but too bad, not approved....

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    Smile What does this tell you ? Now the tales of FreeHold vs LeaseHold

    Quote Originally Posted by mr funny
    http://www.straitstimes.com/News/Hom...ry_655042.html

    Apr 10, 2011

    'No en bloc, but please top up condo lease'

    Arcadia residents plan appeal after SLA rejects bid to extend lease of 33-year-old condominium

    By Jessica Cheam


    No en bloc, please, even if we're residents of one of Singapore's oldest condominiums.

    But we'd like a lease top-up.

    Residents at Arcadia, an early-generation condominium completed in 1983, feel so strongly about this that all have agreed to pay the cost of topping up the lease if the nod is given.

    Mr Anand Danani, 58, who has lived for more than 20 years at Arcadia, said residents are seeking a top-up to conserve the estate - which has 66 years left on its lease - and to preserve its value.

    Mr Danani, a private banker, said his family, like many others in the estate, has built precious memories and solid relationships with neighbours in this spacious estate nestled amid lush greenery in Arcadia Road. His daughter and son spent their formative years there.

    Ask him if he would want a collective sale - the choice of many residents of other leasehold condos here that have reached this age - and he would tell you without missing a beat: No way.

    The residents of the condo are seeking an extension of lease for their ageing estate, not for the sake of a collective sale but to conserve its three buildings on environmental and heritage grounds.

    If they succeed, Arcadia will set a precedent in Singapore's history.

    The condo's management committee told The Sunday Times it applied to the Singapore Land Authority (SLA) last year to top up the lease back to 99 years.

    This was after they worked hard to get the 100 per cent consent from residents, required by the authorities. But the application was recently rejected.

    The owners are all too aware that the condo is approaching the 60-year milestone left on its lease.

    In Singapore, private properties that fall below this level typically depreciate quicker in value as there is a smaller pool of interested buyers. Central Provident Fund (CPF) Board rules dictate that Singaporean and permanent resident (PR) CPF members cannot use their CPF savings to buy private homes with less than 60 years on the lease. Similarly, banks are reluctant to finance loans for buyers of such properties.

    Arcadia's management committee said that in its application to SLA, it stressed its intention to conserve the estate for its architectural value.

    The condo was the first building in Singapore to feature vertical landscaping, which was inspired by the Hanging Gardens of Babylon, one of the original seven wonders of the ancient world. It was built with generous garden terraces on every level and features unusual pyramid-shaped buildings that narrow towards the top.

    It was designed by local architect Chua Ka Seng of Chua Ka Seng & Partners Chartered Architects, who built in planter boxes of almost 12km in length throughout the buildings. The road it sits on, Arcadia Road, is a heritage road where trees are preserved and no development is allowed within a 10m-wide buffer.

    'Arcadia epitomises the green lifestyle that the Government is encouraging and we feel that this estate deserves to be conserved, rather than let it become vulnerable to en bloc sale, which leads to demolition and further wastage of resources,' said the condo council's treasurer Edwin Khew, 62, a former nominated MP.

    The Government has, in recent years, made efforts to 'green' buildings by providing incentives for owners to integrate greenery on their rooftops or walls.

    Arcadia was a pioneer in such vertical landscaping and was ahead of its time, say its residents.

    It was even featured - as 'one of the most dramatic green developments in Singapore' - in an exhibition 'Singapore 1:1 - Island, A Gallery of Architecture & Urban Design' by the Urban Redevelopment Authority (URA) in 2008.

    SLA had told the residents in a letter that 'we are unable to accede to your request at this point in time. The conditions for lease extension include land use intensification and urban rejuvenation'.

    When asked by The Sunday Times about its decision, a spokesman said: 'SLA declines to elaborate further because answering the questions asked would be a breach of confidentiality obligations.'

    SLA added that it 'evaluates each application on its merits and in consultation with the other government agencies'.

    'The specific circumstances of each development determine if a lease extension should be granted and, if so, the length of the extension.

    'For residential uses, the Government may allow lease extension if it results, for example, in land use intensification and mitigation of property decay,' it said.

    Arcadia residents are not giving up and intend to appeal against the decision. Mr Khew and Mr Danani are hoping Arcadia can set an example of how residents who look after their estate 'do not have to go through the wasteful process of en bloc sales'.

    Property experts such as Credo Real Estate managing director Karamjit Singh said it was rare for SLA to grant a lease top-up if it was not for redevelopment or for extensive refurbishment.

    Chesterton Suntec International research and consultancy director Colin Tan said: 'Topping up a lease on conservation and environmental grounds is untested... Planners generally like to keep their flexibility so they can rezone the land for other uses in the future if there's a need.'

    If the residents are all willing to pay the development charge to top up the lease, and show that the buildings will be kept in line with urban renewal, then there could be a case, added Mr Tan.

    If Arcadia does not get a lease top-up, it might then attract collective sale investors. It features large units, from 3,800 sq ft to 7,000 sq ft in size, that could potentially be redeveloped into smaller units.

    Resident Stewart Yen, who is in his early 60s and CEO of a security business, dreads such an outcome.

    'The buildings here have stood the test of time. We also have a diverse mix of people here who have gained many memories in this estate. We take pride in maintaining this as our home, and we want to keep it that way.'

    [email protected]

    It is gahment's land. KPKB also no use wan. Unless you top up their coffers, nothing is free for you.

    So you want FH land title or Leasehold strata in Singapore.

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    For China and HK, and even Indonesia,
    even though they are leasehold lands (30,40 and 50 years)
    but there is an implicit agreement that as long as the
    use of the land (residential, commercial, agricultural) is still economically viable, the government there WILL MOST LIKELY extend the lease.

    But in the case of Singapore's 99 years LH,
    there is an EXPLICIT agreement that the lease WILL MOST LIKELY NOT BE EXTENDED.

    I believe the case with UK is the same as HK.
    Anyone care to share?

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    Quote Originally Posted by vboy
    But in the case of Singapore's 99 years LH,
    there is an EXPLICIT agreement that the lease WILL MOST LIKELY NOT BE EXTENDED.
    I wonder if there is any way for owners of strata-titled property/condos here to en-bloc their condos on a 99 LH basis and retain share of the freehold. Or is that too complicated.

    For one of my UK properties, we (the original owners) bought up the freehold because they were in dire financial difficulties and we hold a share of the freehold.

    In UK there are many parties that can be the freeholder, from the council (public body) to private individuals or companies. Each case is individual and you have to look at who is the freeholder if you purchase a LH property. No guarantee that the FH would be renewed (unless it's council in which case it is likely to be renewed).

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    There was press reports that Mandarin Gardens and Bayshore Park had strong objection to en bloc sale. Are they not aware that their leases will not likely be extended without redevelopment. Their assets will be depreciating a lot more once they reach 40 years. Given the case, why are the owners still hanging on to their flats? Any owners from MG or BP care to share?

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    I am not from these but not all residents thing with their 'investment hats'. These non-En Bloc-ers are really proud and happy staying and consuming their homes...so they don't mind losing on their depreciating asset. Maybe some figure, when it's time, the developers can pay more to 'top-up'.

    Quote Originally Posted by Amber Woods
    There was press reports that Mandarin Gardens and Bayshore Park had strong objection to en bloc sale. Are they not aware that their leases will not likely be extended without redevelopment. Their assets will be depreciating a lot more once they reach 40 years. Given the case, why are the owners still hanging on to their flats? Any owners from MG or BP care to share?

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    One of the most frustrating thing living in condos is when u want to go for enbloc but not enough number or you don't want enbloc but the others overrule so you bo bian.... Cry also no use...

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    In cases like the Hillcrest Arcadia, where the top-up lease is rejected by SLA and residents do not want to go en-bloc, does that mean the property will depreciate all the way to 0 value at the end if their remaining 60+ years?

    That also means that SLA will take back the land at the end of 99 years and residents will have to evade the place then?

    Appreciate some advice here....

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    given your assumptions, that is correct. after another 60+ years, it will be worthless assuming no top up nor en bloc.

    there has not been any precedent for condos so far but for landed there is. there are also some landed which have 50 years lease left and the depreciation is accelerating for those.



    Quote Originally Posted by spinoza
    In cases like the Hillcrest Arcadia, where the top-up lease is rejected by SLA and residents do not want to go en-bloc, does that mean the property will depreciate all the way to 0 value at the end if their remaining 60+ years?

    That also means that SLA will take back the land at the end of 99 years and residents will have to evade the place then?

    Appreciate some advice here....

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    Quote Originally Posted by spinoza
    In cases like the Hillcrest Arcadia, where the top-up lease is rejected by SLA and residents do not want to go en-bloc, does that mean the property will depreciate all the way to 0 value at the end if their remaining 60+ years?

    That also means that SLA will take back the land at the end of 99 years and residents will have to evade the place then?

    Appreciate some advice here....
    Theoretically yes. But in reality, most likely the residents will vote for collective sale in the end. It does not make sense to let the value of the property depreciate to zero when it can still fetch some decent price. The differential premium payable by the developers to top up the lease to 99 years increases with each passing year. It will reach a tipping point where potential developers may feel that it is no longer worthwhile to pay the huge differential premium. They have to decide quickly.

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    Quote Originally Posted by fclim
    Theoretically yes. But in reality, most likely the residents will vote for collective sale in the end. It does not make sense to let the value of the property depreciate to zero when it can still fetch some decent price. The differential premium payable by the developers to top up the lease to 99 years increases with each passing year. It will reach a tipping point where potential developers may feel that it is no longer worthwhile to pay the huge differential premium. They have to decide quickly.
    If the developers are paying huge differential premium with each passing year, they'll likely pass down the cost to the residents? which mean that the en bloc compensation will not be as promising?

    Couple with the fact that developers know that the asset is fast depreciating, they would probably use that to negotiate down the en bloc compensation?

    What do you think?

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    It's all about timing and the value of the land.
    DC and Top-ups are all part of the costing, in addition to the EB price.
    They will factor in the GFA and selling price to know their profits.

    If EB is launch at a good time, they can make up for some 'years' in Top-up. But who can be so timely as Farrer Court?

    Quote Originally Posted by spinoza
    If the developers are paying huge differential premium with each passing year, they'll likely pass down the cost to the residents? which mean that the en bloc compensation will not be as promising?

    Couple with the fact that developers know that the asset is fast depreciating, they would probably use that to negotiate down the en bloc compensation?

    What do you think?

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    I am just curious about the issue of land use intensification, does it mean that if there is empty space in the development to build another condo building, govt will allow the whole piece of land and the old buildings to have lease top up for that reason?

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    Quote Originally Posted by Regulators
    I am just curious about the issue of land use intensification, does it mean that if there is empty space in the development to build another condo building, govt will allow the whole piece of land and the old buildings to have lease top up for that reason?
    There are a few things to look out for

    1. The baseline plot ratio stipulated by the government authorities at the time of constructing the existing building (PR1)
    2. The maximum allowable plot ratio as in the latest master plan (PR2)
    3. The exiting built-up area (BA1)

    If BA1 < PR1=PR2, additional block(s) of building can be built without paying DC
    If PR1<=BA1<PR2, can build additional block(s) but DC is payable for the difference between BA1 and PR2

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    so if development is allowed with or without DC, will the lease be topped up for the entire project?

    Quote Originally Posted by SpinCity
    There are a few things to look out for

    1. The baseline plot ratio stipulated by the government authorities at the time of constructing the existing building (PR1)
    2. The maximum allowable plot ratio as in the latest master plan (PR2)
    3. The exiting built-up area (BA1)

    If BA1 < PR1=PR2, additional block(s) of building can be built without paying DC
    If PR1<=BA1<PR2, can build additional block(s) but DC is payable for the difference between BA1 and PR2

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    Quote Originally Posted by Regulators
    so if development is allowed with or without DC, will the lease be topped up for the entire project?
    I tink subjected to ura approval....case by case basis.

    There r cases in cbd area whereby projects r denied for a lease top up.....ura intend to take back the lease land

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    Default Re: 'No en bloc, but please top up condo lease'

    Quote Originally Posted by devilplate View Post
    I tink subjected to ura approval....case by case basis.

    There r cases in cbd area whereby projects r denied for a lease top up.....ura intend to take back the lease land


    its been 10 yrs since ...

    anyone any news on Hillcrest Arcadia land lease top up ?

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