Published May 24, 2007

En bloc deals hit $6.38b - nearly topping all of last year's

Transactions for barely five months are just 18% short of the $7.75b for whole of 2006


(SINGAPORE) A total of 39 collective sale sites have been sold for some $6.38 billion since the start of this year, up to May 15 - just 18 per cent shy of the $7.75 billion record achieved last year, show latest figures from Jones Lang LaSalle.

The property consulting firm's regional director and head of investments, Lui Seng Fatt, expects the momentum of en bloc sales to continue for the rest of this year, predicting a $10 billion figure being hit for the full year, assuming prices hold.

Mr Lui attributes the buoyant collective sales figure so far this year to the trend of mega sites being sold, as well as rising unit land prices as developers race to replenish their high-end residential landbanks in the face of strong sales of their luxury housing projects.

'In addition, several new players from overseas are coming in, mostly foreign funds partnering local developers,' he said.

These include the likes of Morgan Stanley Real Estate Fund, Qatar Investment Authority and Forum Partners.

The current benchmark price for residential land, of $1,735 psf per plot ratio, was set when Overseas Union Enterprise exercised an option to buy The Parisian at Angullia Park in January this year. This is almost double the $876 psf ppr fetched for Habitat II in the prime Ardmore/Draycott area in September 2005. 'Following the quantum jump in land prices achieved over the past 12 to 24 months, prices could still go up but further increases are likely to be more moderate,' Mr Lui reckons. 'Current price levels will comfortably hold for the rest of the year.'

Market watchers expect more big en bloc sale sites to be transacted in the coming months. Farrer Court, with a whopping 838,488 sq ft land area and $1.2 billion reserve price, was launched just last week. More billion dollar sites are expected to be offered, including The Claymore.

Among the big transactions so far this year are Leedon Heights ($835 million), Gillman Heights (sold for $548 million), Horizon Towers ($500 million) and Tampines Court ($405 million).

JLL's analysis shows that the $6.38 billion worth of en bloc sale transactions sealed in the first four and a half months of this year included 39 transactions, whereas the $7.75 billion for the whole of last year covered a much larger number of deals - 62.

That shows that the size of deals has shot up, as there have been more mega sites as well as the increase in unit land prices.