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Thread: Mandarin Gardens' enbloc sales committee disbands

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    Default Mandarin Gardens' enbloc sales committee disbands

    Mandarin Gardens' enbloc sales committee disbands
    By Ryan Huang/Cheow Xinyi, Channel NewsAsia | Posted: 29 December 2009 2101 hrs


    SINGAPORE: One condominium in the east has officially thrown in the towel for an enbloc sale - at least for now.

    The 1080-unit Mandarin Gardens saw the disbanding of its two-year-old collective sales committee last week.

    In a letter to residents, the main reasons cited were unfavourable market conditions and the moving in of new residents, whose views the committee felt should be heard.

    The sales committee had been largely inactive since the beginning of the global financial crisis last year. Some members had also quit due to personal reasons or after selling off their unit.

    Back at the height of the 2007 property boom, Mandarin Gardens was one of the many enbloc hopefuls.

    This follows the similar fate of another sales committee at nearby seafront condominium Bayshore Park. The committee ceased to exist earlier this year after its formation was challenged by some residents.

    - CNA/sc

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    Luckily no enbloc in 2009 .. otherwise cry until no tears

    MANDARIN GARDEN CONDOMINIUM SIGLAP ROAD Condominium 1 1,058,000 829 Strata 1,277psf Aug-12
    Ride at your own risk !!!

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    Quote Originally Posted by phantom_opera
    Luckily no enbloc in 2009 .. otherwise cry until no tears

    MANDARIN GARDEN CONDOMINIUM SIGLAP ROAD Condominium 1 1,058,000 829 Strata 1,277psf Aug-12
    Congrats to those residents who oppose enbloc....I always think if really want to cash out, just sell individually, no need to sell to developer. The time when you can sell at a premium of 20-50% above market price, be prepared to buy back at 50-100% for comparable unit. And you must buy back immediately as the longer you wait, the higher the premium one needs to pay.

    Thus far, I think only Farrer Count enbloc really benefit all residents $$wise....

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    If MG had succeeded in late 2007 or last year, they would be better off. Their lease is running down and coming to 30 years. URA will not allow topping up of lease without intensifing the use of land. En bloc is probably the best way to go to unlock the value of their assets. MG will be like another Acardia soon.

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    Quote Originally Posted by HP65
    Congrats to those residents who oppose enbloc....I always think if really want to cash out, just sell individually, no need to sell to developer. The time when you can sell at a premium of 20-50% above market price, be prepared to buy back at 50-100% for comparable unit. And you must buy back immediately as the longer you wait, the higher the premium one needs to pay.

    Thus far, I think only Farrer Count enbloc really benefit all residents $$wise....
    Don't understand your argument
    If can sell at a premium of 25-50%, but need to pay additional 50-100% for comparable unit
    Is it still better off than sell at no premium but need to pay additional 50-100% for a comparable unit?

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    Quote Originally Posted by HP65
    Congrats to those residents who oppose enbloc....I always think if really want to cash out, just sell individually, no need to sell to developer. The time when you can sell at a premium of 20-50% above market price, be prepared to buy back at 50-100% for comparable unit. And you must buy back immediately as the longer you wait, the higher the premium one needs to pay.

    Thus far, I think only Farrer Count enbloc really benefit all residents $$wise....

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    solid, profit more than 1m

    2012-07-18 #14-XX 2,034 1,076psf
    2003-06-30 396psf $1,383,120 3,306 11.7%
    Ride at your own risk !!!

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    Quote Originally Posted by SpinCity
    Don't understand your argument
    If can sell at a premium of 25-50%, but need to pay additional 50-100% for comparable unit
    Is it still better off than sell at no premium but need to pay additional 50-100% for a comparable unit?
    Sorry, need to clarify. My point being you do not need to buy back (at 50-100% premium) if you did not sell enbloc in the first place. If owners did not sell enbloc, developer cannot sell you new units since they do not have land. Unless one decides to exit market permanently, the replacement unit is usually more expensive like for like. There are only 5 net gainers in an enbloc exercise: govt, developer, banks, lawyers and agents. Owners usually lose out in an enbloc exercise.

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    $1m profit made just before 2009 and after 2009 makes a lot of difference. The $1million can be used to buy another property just after lethman bros saga and would have made at least $300k. Unfortunately not now.
    Quote Originally Posted by phantom_opera
    solid, profit more than 1m

    2012-07-18 #14-XX 2,034 1,076psf
    2003-06-30 396psf $1,383,120 3,306 11.7%

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    Quote Originally Posted by SpinCity
    Don't understand your argument
    If can sell at a premium of 25-50%, but need to pay additional 50-100% for comparable unit
    Is it still better off than sell at no premium but need to pay additional 50-100% for a comparable unit?
    If you enbloc you get a premium to an individual unit sale but the time for the whole process from sales committee start to getting the cheque is so long getting a replacement unit can have risen more than your sale price - hence no real advantage - better to not sell and stay in your original condo.

    Enbloc process is such that winner is developer - loser is seller who thinks they are getting a good deal. .................. with a few exceptions here and there

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    EB got different phases and thus possible actions in each phase. But EB is basically cashing out of the surplus value of the land.

    In early phase - eg 2010, then you must have cash to buy before you get cheque and possibly upgrade and preferably to another EB property.
    So you lock-in your EB price and buy back-to-back.

    Mid-phase - eg 2011, is probably the worst timing. Prices are escalating - so you need to be very nimble. But you might get a 'premium' bid for your EB.

    Late-phase eg 2007, 2012?, is the Farrer Court and others prospect. Highest point of bidding and prices plateau. Here is the best for down-graders or balsy player, who rent first before buying.

    So EB can be good - but as with anything,you need good timing and reading of market direction. Caveat - this is just the monetary aspect - not commenting on architecture, emotional attachment and morality.

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    I beg to differ, I think the exception is not getting a good deal. I think everybody wins... some more some less. If you are not planning to sell but forced to by overwhelming majority then its a different matter altogether. It is a windfall actually...

    The no-loss rule ensures nobody loses out financially in an enbloc, so you break even at the worst case. More often than not, owners make... wrt the cheques paid out, the owners are paid an advance and with that they can put in a deposit for another property. Meanwhile, they can stay in their homes till their other newly bought property is ready... anyway, all the terms can be negotiated... the enbloc committee just need to engage a good lawyer that's all.

    Btw, the developer definitely has to make, they are in it for a profit. But their risk is many times higher.. what if the market turns the other way? Their liability is many times bigger.

    Quote Originally Posted by EBD
    If you enbloc you get a premium to an individual unit sale but the time for the whole process from sales committee start to getting the cheque is so long getting a replacement unit can have risen more than your sale price - hence no real advantage - better to not sell and stay in your original condo.

    Enbloc process is such that winner is developer - loser is seller who thinks they are getting a good deal. .................. with a few exceptions here and there

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    Quote Originally Posted by HP65
    Sorry, need to clarify. My point being you do not need to buy back (at 50-100% premium) if you did not sell enbloc in the first place. If owners did not sell enbloc, developer cannot sell you new units since they do not have land. Unless one decides to exit market permanently, the replacement unit is usually more expensive like for like. There are only 5 net gainers in an enbloc exercise: govt, developer, banks, lawyers and agents. Owners usually lose out in an enbloc exercise.
    still don't understand your point
    If a owner wants to sell, he/she definitely can sell at a higher price through en-bloc than individually
    As for where (or whether) the seller want to buy a replacement unit, that's a different matter

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    Quote Originally Posted by EBD
    If you enbloc you get a premium to an individual unit sale but the time for the whole process from sales committee start to getting the cheque is so long getting a replacement unit can have risen more than your sale price - hence no real advantage - better to not sell and stay in your original condo.
    It all depends on where in the cycle when the enbloc process starts

    Quote Originally Posted by EBD
    Enbloc process is such that winner is developer - loser is seller who thinks they are getting a good deal. .................. with a few exceptions here and there
    Developers take on a much bigger risk than the seller
    Buyers (individuals or developers) who pay a hefty premium for enbloc (potential) are more likely to be the lossers

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    Purely from a financial perspective, MG sitting on a 99-yr leasehold land with lease coming to 30 years is in danger of depreciating value. This is made worst with new law requiring developer to buy the land and sell all new units of the new development within 5 years. It is highly risky for any developer to buy such a large piece of land and to sell the development within 5 years.

    Once people understand the challenges facing developments like MG, people will no longer attach a premium to MG because of en bloc potential and the resale value will drop according to the remaining lease.

    The resistance within MG not to en bloc because they could not find similar replacement units within the same location without paying a higher price is understandable but technically flaw. They did not understand or refuse to face the reality that their development will eventually depreciate as the lease run down and they will never ever be able to buy replacement at all if they will to sell individually.

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    yup ... the 5y penalty thing is a big turn off for enbloc of such a big land
    Ride at your own risk !!!

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    This one is a game changer for EB and for bigger plots in general...already those with >800m EB tag was hard to finance - with this ruling, these developments have to wait longlong till aggressive leveraging comes back in fashion

    Quote Originally Posted by phantom_opera
    yup ... the 5y penalty thing is a big turn off for enbloc of such a big land

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    Pine Grove shares the same fate.
    Quote Originally Posted by gn108
    This one is a game changer for EB and for bigger plots in general...already those with >800m EB tag was hard to finance - with this ruling, these developments have to wait longlong till aggressive leveraging comes back in fashion

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    Quote Originally Posted by phantom_opera
    yup ... the 5y penalty thing is a big turn off for enbloc of such a big land
    Rules are not permanent.. they can always be change n amended!
    There might come a rule where if a developer buys a plot of land exceeding a certain size, they will b given more than 5yrs to sell their product.

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    Quote Originally Posted by fiat500
    Rules are not permanent.. they can always be change n amended!
    There might come a rule where if a developer buys a plot of land exceeding a certain size, they will b given more than 5yrs to sell their product.
    Until the rule is changed, the possibility to en bloc for these developments is remote.

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    to make a small group of loud whiners happy who cry foul tat private prperties r so expensive and beyond their reach, many others suffered.

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    Quote Originally Posted by Leeds
    Purely from a financial perspective, MG sitting on a 99-yr leasehold land with lease coming to 30 years is in danger of depreciating value. This is made worst with new law requiring developer to buy the land and sell all new units of the new development within 5 years. It is highly risky for any developer to buy such a large piece of land and to sell the development within 5 years.
    So, assuming I have a property sitting on a very large piece of FH land of >1,000,000 sqft, will I have the same trouble achieving enbloc? Sorry if silly question, still new to this property game....

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    Quote Originally Posted by Sleepyhead
    So, assuming I have a property sitting on a very large piece of FH land of >1,000,000 sqft, will I have the same trouble achieving enbloc? Sorry if silly question, still new to this property game....
    anything is possible if the money is right

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    It really depend on the profile of the owners in the development.
    Quote Originally Posted by Sleepyhead
    So, assuming I have a property sitting on a very large piece of FH land of >1,000,000 sqft, will I have the same trouble achieving enbloc? Sorry if silly question, still new to this property game....

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    Most people would love to have this kind of problem...

    Quote Originally Posted by Sleepyhead
    So, assuming I have a property sitting on a very large piece of FH land of >1,000,000 sqft, will I have the same trouble achieving enbloc? Sorry if silly question, still new to this property game....

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    if you have rich neighbours who prefer their big rooms and spend money to spruce up the place, then you can forget about en bloc in a long long time.

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    Quote Originally Posted by kane
    if you have rich neighbours who prefer their big rooms and spend money to spruce up the place, then you can forget about en bloc in a long long time.
    Just like Tan Tong Meng Tower, all layout 3240sf ??
    Enbloc couldn't go thru..

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    Quote Originally Posted by SpinCity
    Don't understand your argument
    If can sell at a premium of 25-50%, but need to pay additional 50-100% for comparable unit
    Is it still better off than sell at no premium but need to pay additional 50-100% for a comparable unit?
    Now we have a live example. Thomson View just enbloc. Min 1313sqf owners get $1.6m (at a later time, not now...). With $1.6m, can you find a comparable unit with the same view and size? Base on my search criteria, the sellers are unlikely to find something similiar without sacrificing view, location or size....that's my argument.

    And imagine if the market continue to move up, by the time the sellers get their $1.6m then go shopping for a replacement unit, especially those with 1 ppty only, they might not even be able to get those unitws i found. Eg, now $1.3m can get a smaller 1227 sqf Bishan Point. Later, this unit might call for $1.5m by the time the sellers get their money. End of the day, enbloc sellers lose out most of the time.

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    Quote Originally Posted by HP65
    Now we have a live example. Thomson View just enbloc. Min 1313sqf owners get $1.6m (at a later time, not now...). With $1.6m, can you find a comparable unit with the same view and size? Base on my search criteria, the sellers are unlikely to find something similiar without sacrificing view, location or size....that's my argument.

    And imagine if the market continue to move up, by the time the sellers get their $1.6m then go shopping for a replacement unit, especially those with 1 ppty only, they might not even be able to get those unitws i found. Eg, now $1.3m can get a smaller 1227 sqf Bishan Point. Later, this unit might call for $1.5m by the time the sellers get their money. End of the day, enbloc sellers lose out most of the time.
    Base on $1.6mio/ 1313 psf, you are selling at approx $1200 psf. Best bet/ closest equivalent is Flame Tree Park also asking at $1200 psf. +ve is you get a younger unit that is also free hold but after considering transaction costs (stamp, agent fees) and reno (since its already 20 over years old) costs, you will probably have to cough out cash.

    Again, I'm assuming one has the money or d/p to pay for the Flame Tree unit first before getting the $1.6m from Wee Hur. If one doesn't have the money but have to wait for the enbloc proceed, they might end up paying even more for a replacement unit.

    That's why my opinion is enbloc is seldom beneficial for the sellers and could never understand nor support rationale behind enbloc.

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    Time for thevcommitte to reform, given Thomson View's en bloc success.

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