But more than 20 units there were actually owned by an extended family, the Lims, for decades.

At one point, three generations were living under one roof.

Meng Garden Apartments in Lloyd Road, off Killiney Road, has been sold to boutique developer TG Development (TGD) for $137 million.

The deal was sealed last Friday after the developer put down a 10 per cent deposit.

The majority of the apartments in the eight-storey block belonged to the 10 children of patriach Lim Siew Meng.

The former deputy managing director of local trading firm Lim Teck Lee bought the 35,639 sq ft plot of land from the Alkaff family before he died in 1976.

The Lims were living in a two-storey house, the original residence of the Alkaffs, in Lloyd Road before building Meng Garden in 1985.

Mr Alwi Alkaff, 82, said his father, Mr Syed Mohamed Alkaff, sold the house to the Lims as ‘the Alkaff family was getting bigger and every member wanted his own house’.

The Lims declined to be interviewed.

TGD managing director Ong Boon Chuan told The Sunday Times that an upmarket development similar to those it developed in Sentosa Cove will be built there.

The freehold site is zoned for residential use. It has a 2.8 plot ratio and a 10-storey height control.

At about $1,380 per sq ft (psf) per plot ratio, it is ‘a good deal’, said Mr Ong. ‘The land is squarish and easy to design, and it is near Somerset MRT.’

This is not the first time residents have put the property up for collective sale. In 2007, they asked for $1,488 psf per plot ratio, but there were no takers.

CB Richard Ellis brokered this collective sale. The tender, put up last month, was reported to have attracted six bidders, said The Business Times.

Age has taken its toll on the property. Pieces of discarded furniture were seen lining one end of the lift lobby.

The security guard house, near the lift lobby, looked dusty and reeked of stale cigarette smoke.

Property consultancy Cushman & Wakefield’s managing director Donald Han said that an old development is like an old person whose health-care costs go up with age.

‘In some cases, it is not worth repairing the water-proofing of floors or lifts,’ said Mr Han.

In addition, a collective sale today can give home owners a 30 to 50 per cent premium over the selling price in the second-hand market, he said.

Source: Sunday Times, 25 Jul 2010

Sole marketing agent Jones Lang LaSalle said the 21,879 square foot site is zoned for residential use and sits in the Holland Park Good Class Bungalow Area.

It has a gross floor area of about 43,691 square feet and has the potential to be redeveloped into a boutique residential development of 52 units of 800 square feet each.

Holland Tower is a 14-storey tower development consisting of 19 units and is in close proximity to the Singapore Botanic Gardens, Holland Village and the Dempsey Cluster.

Ms Stella Hoh, national director and head of Investments at Jones Lang LaSalle, said: “With strong take up rate of residential new launches in the vicinity, this elevated site is expected to draw strong interest due to its locality, proximity to amenities and the potential to be redeveloped into a boutique development offering exclusivity and lush greenery.”

“We believe that the oncoming tenders for private land will receive keen interest from developers,” she added.

The tender for Holland Tower will close at 3pm on August 25.

Source: Channel News Asia, 20 Jul 2010

They were a feature of the last boom but fast fell out of favour when markets went south, yet there are signs that another collective sale rush is in the making.

There have been at least 16 collective sales this year, not counting many smaller ones that may have gone unreported.

This is in stark contrast to last year, when only one collective sale was sealed. There were 10 in 2008 but most were late spillover deals from the boom of 2006 and 2007.

The greatest spell of collective sales remains the first six months of 2007, when at least 55 projects were sold for an astounding $9.3 billion.

The slow start this year is not due to a lack of demand for collective sales, but a shortage in supply arising from the extra time needed to meet the tougher legal formalities and more detailed logistical arrangements when gathering owners’ consent.

We should certainly see more collective sales over the remaining months of the year as the organisational momentum picks up pace.

As many as 80 developments are believed to have formally embarked on steps to sell their properties en bloc, although the actual figure may well be more. But not all will secure the 80 per cent owners’ mandate or find a buyer.

Numbers aside, larger projects are also expected to be introduced this year and next.

The average deal size of the 16 successful cases this year is $50 million – a far cry from the average deal size of $170 million in the first half of 2007.

The 52-unit Goodrich Park near Kovan MRT station was sold in a collective sale to BBR Holdings for $86 million this month, but as the deal has not won unanimous approval from owners, it may need approval from the Strata Titles Board (STB).

Each of its owners is set to receive gross sale proceeds of between $1.55 million and $1.72 million – or about 70 to 80 per cent more than the market price.

In April, Culford Gardens in Siglap was also sold to Fragrance Properties for $39 million.

Despite the dominance of the Government Land Sales (GLS) programme this year, we believe that collective sales are still relevant in today’s market as they fill the void left by the programme.

GLS sites have leasehold tenure and are mostly located in suburban areas, and their large-sized plots mean they typically cater mainly to bigger developers.

In most cases, collective sales complement the GLS programme, especially when they produce large prime freehold sites, which are in short supply.

However, leasehold collective sales in mass-market locations might find it harder to make large profits as developers might prefer the relative ease and certainty that GLS sites offer.

Owners contemplating such sales should also understand that sale activity takes place in waves since the factors that give rise to price differentials do not stack up for very long.

Many owners get concerned over the rising cost of replacement homes but this paradox is always present as collective sales inherently occur only when the market is buoyant. Acting decisively might help offset the risks of being caught cold.

It is also important for owners to elect objective and honest leaders, appoint and listen to competent lawyers and property consultants, set realistic prices, act decisively and stay united to ensure a happy ending.

Some owners might also wonder if there is a possibility that we will see another Horizon Towers dispute.

Horizon Towers was the most high-profile property sold in early 2007, just before the steep run-up in land prices. This factor and other technical irregularities resulted in the Leonie Hill Road condo becoming embroiled in one legal suit after another before the deal finally collapsed.

Since then, the laws have been refined. They now load more work and costs upfront for the owners, providing relief for developers with clearer rules.

Recent changes include the STB being relieved of its role of making rulings in disputed cases. The STB will continue its mediatory role, but this will be limited to 60 days – again to expedite the resolution of disputes over contentious sales.

In other words, warring parties can head to the High Court earlier in the process to have their disputes resolved, reducing the time taken to resolve the more difficult cases.

Minority owners are now unlikely to find as many faults as most of the typical grouses in the past have been adequately addressed. As a result, we expect fewer cases to reach the High Court and the Court of Appeal.

As we also do not see the market moving this year and next as dramatically as it did in the boom years, the motivation for a minority owner to challenge a sale may not be as strong as in 2007.

The laws are more robust and structured now and should make collective sales less controversial and more predictable.

Karamjit Singh is managing director and Pamela Kow the senior manager of Credo Real Estate.
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More legal formalities

The slow start this year is not due to a lack of demand for collective sales, but a shortage in supply arising from the extra time needed to meet the tougher legal formalities and more detailed logistical arrangements when gathering owners’ consent.

Source: Straits Times, 18 Jul 2010

Last Wednesday, a relatively small property, Melrose Court, off Balestier Road, was launched for collective sale.

Owners of the 32 freehold units there are

asking for $48 million, and hoping to reap between $1.23 million and $2.46 million each.

Marketing agent Colliers International said the ‘en bloc’ premium each seller will get is around

40 per cent to 50 per cent more than what he can get if he were to sell his unit on his own.

Compared with those of the collective sale boom of 2006-2007, the premiums are lower these days because existing apartment values are high, said Mr Ho Eng Joo, the firm’s executive director of investment sales.

Property pundits say the market recovery last year has been fast and furious, so prices are now starting from a higher base.

‘We see an erosion of en bloc premiums today. In 2006 and 2007, the premiums can easily be 80 per cent to 100 per cent. Today, they are more like 30 per cent to 50 per cent,’ said Mr Jeffrey Goh, head of investment sales at HSR International.

Some investors may want to cash in fast before the collective sale. This will close the gap between the potential collective sale price and the individual sale price, experts said.

But the higher prices they fetch may not be a true reflection of the market, said Knight Frank executive director Nicholas Wong.

‘A handful of them may be able to sell at higher prices before the collective sale. But if all the owners were to go out and sell their units individually, they wouldn’t get those kinds of prices,’ he said.

The rest of the owners who may now want to pull out of the collective sale after some sell at higher prices, or who then become unhappy with the collective sale prices, should be aware of the risks of a failed sale, as the value of their estate will likely come down if that happens.

Also, today’s new rules mean that a two-year restriction period will kick in, making it harder to restart the collective sale process after a failed attempt, Mr Wong said.

An expert, who declined to be named, said: ‘The en bloc premium is relative. It just has to be a level that can get people excited, with which they think they are able to find a replacement property. This would be around 50 per cent more than what they can sell at individually.’

Besides prices having moved up to a higher base, most of the attractive prime sites have already been sold in previous collective sale booms over the past 15 years, property experts say.

‘Nowadays, sites that have been sold or put up for sale are in the city fringes and are small,’ said Ms Suzie Mok, director of investment sales at Savills Singapore.

‘The en bloc premiums for prime spots tend to be higher than those for suburban estates as they are the more sought-after sites. The prime spots appeal to the bigger developers who are willing to pay more because of their scarcity and the appeal of the posh address.’

While there are still underbuilt sites out there, many of the estates eyeing collective sales today are very old developments and may have low redevelopment potential, experts said.

Some of these estates have already used up their maximum built-up area allowed, and may thus get a lower premium when they want to sell en bloc, the experts pointed out.

Source: Sunday Times, 18 Jul 2010

A two-storey bungalow stands on the sprawling 61,240 sq ft freehold site, which can be redeveloped into eight luxury bungalows or a strata landed-housing scheme comprising either 14 bungalows or 28 semi-detached houses or 37 terrace houses, according to CB Richard Ellis, which brokered the sale.

Depending on how intensively Far East redevelops the site – beyond a baseline plot ratio of 0.7 – a development charge may be payable.

The plot is zoned for three-storey mixed landed use under Master Plan 2008.

There are also a few condos in the area, such as Parbury Hill Condominium and Riviera Residences, although these are on residential sites with a 1.4 plot ratio – on which non-landed residential developments are allowed – under Master Plan 2008.

CBRE marketed 31 Parbury Avenue through a tender that closed in late May and is said to have attracted a handful of bids.

The property is being sold by the family of the late Goh Seong Pek, one of the founders of Tat Lee Bank.

Sales of residential sites have been picking up as developers seek to restock landbanks following strong housing sales last year. Besides the Government Land Sales Programme, collective sales and other private-sector sources have been providing residential land for developers.

BS Capital recently bought the Colourscan Building in Kim Keat Road in the Balestier area with a view to redeveloping the 32,544 sq ft freehold site into a 20-storey apartment project. The Urban Redevelopment Authority has approved a rezoning of the site from Business 1 to residential use with 2.8 plot ratio – the ratio of maximum potential gross floor area to land area. BS Capital’s purchase price of just over $36 million reflects a unit land price of $670 per sq ft of potential gross floor area, including an estimated Development Charge (DC) of almost $25 million.

In District 9, Cavenagh Mansions, which comprises 21 apartments, has been sold by Teck Jin – which developed the project about 20 years ago – to Selangor Dredging for $42.38 million or about $1025 per sq ft of potential gross floor area including an estimated $267,000 DC. The Malaysian company plans to redevelop the freehold site.

Source: Business Times, 16 Jul 2010

Property consultancy Knight Frank said this translates to a land price of S$1,025 per square foot per plot ratio on the potential saleable area of 41,608 square feet.

SDB Asia is a wholly-owned subsidiary of Selangor Dredging Berhad (SDB).

SDB is a property development and management group listed on the main board of Bursa Malaysia.

Cavenagh Mansions sits on a land area of 19,813 square feet.

The district 9 site currently comprises 21 apartment units with sizes ranging from 90 to 153 square feet.

The development charge is estimated at S$267,000.

Cavenagh Mansions is fully owned by Teck Jin (Private) Limited, and the sale therefore does not need approval by the Strata Titles Board or High Court.

Source: Channel News Asia, 16 Jul 2010

A key change centres on when an attempt to sell an estate en bloc fails to garner enough backing from owners.

To discourage repeated attempts when there is insufficient interest, a two-year restriction period will be imposed after a failed collective sale attempt.

During this period, the first retry to convene an extraordinary general meeting to reappoint a sale committee will require the agreement of 50per cent by share value, or of the total number, of owners.

This is up from the current level of 20per cent by share value or 25per cent of the total number of owners.

For the second and subsequent retries, approval from 80per cent is needed.

To speed up the sale process, the Strata Titles Board (STB) will focus on its role as a mediator, instead of also trying to make rulings in disputed cases.

Some recent attempted collective sales, such as Horizon Towers, have become bogged down in disputes that have dragged on for two years or more.

The new rules and other amendments to the Land Titles (Strata) Act were passed by Parliament on May 18.

Source: Straits Times, 15 Jul 2010

The Ministry of Law gave more details yesterday on how the Land Titles (Strata) (Amendment) Act will apply. For instance, under the new Act, there will be a waiting time of just one hour for the quorum of 30 per cent of share value to be reached at extraordinary general meetings (EGMs). This will apply to all EGMs held on or after the commencement date of the new Act, including those for which notice has been served. Also, the new Act stipulates that once a sales committee (SC) is formed, it will have one year to obtain the first signature for the collective sale agreement (CSA) or face automatic termination.

For existing SCs which have not collected any valid signatures, the one-year period begins on the commencement date of the new Act, regardless of how long they have been in office. For SCs set up after the new Act takes effect, the one-year period begins on the day the SCs are elected at EGMs.

Another key revision to the Act introduces a two-year restriction period after a potential collective sale falls through. Within this period, the first repeated attempt to convene an EGM will require consent from 50 per cent of share value or number of owners. For the second and subsequent repeated attempts, 80 per cent will be needed.

This two-year restriction period will apply to all failed attempts which occur on or after the commencement date of the new Act.

Source: Business Times, 15 Jul 2010

(SINGAPORE) A freehold residential project at Balestier and 14 freehold strata shop units at Holland Village are up for sale.

The tender for Melrose Court, at 10 Lorong Limau off Kim Keat Road, has opened, with an indicative price of around $48 million for the four-storey 32-unit development.

Melrose Court is on a site with a gross plot ratio of 2.8. Colliers International, which is handling the collective sale, said that it can be redeveloped into a 22-storey project of 88 apartments, each measuring 830 sq ft. The development charge will be around $2.38 million.

The new project would have a total gross floor area of 73,271 sq ft, including an additional 10 per cent of space allowed for balconies. The total land price would work out to around $688 per sq ft per plot ratio.

More than 80 per cent of Melrose Court’s owners have agreed to the collective sale. Based on the asking price of $48 million, each of them stands to receive $1.23-2.46 million if the deal goes through.

Colliers believes that the site will attract mid-size developers as the development cost is relatively small. Collective sales involving projects on the fringe of the city have a high chance of success because of a more ‘manageable gap’ between asking and offer prices, said the agency’s investment sales executive director Ho Eng Joo.

Also, the collective sale market is slowly recovering, he said. Projects sold en bloc recently include Meng Garden Apartments, People’s Mansion and the Colourscan building.

Colliers is also managing the tender for 14 freehold strata units on the second floor of Holland Road Shopping Centre. The indicative price for the adjoining shops is $28-29 million, which works out to $5,051-5,231 psf based on the total gross floor area of 5,543 sq ft.

The owner, an investment company, is selling the shops in line with a portfolio reorganisation. A home decor retailer currently leases all 14 units at a monthly rent of between $10 and $11 psf, under a tenancy agreement that expires in 2013.

The large tenant was able to secure rent slightly below the market rate. According to Colliers’ agency and business services deputy managing director Grace Ng, rents in the shopping centre are higher for smaller units and can range from $20-40 psf.

It is rare for a large retail space in a popular spot to be up for sale, Ms Ng said. In 2008, a unit on the second floor of the mall was sold for $4,955 psf.

According to her, properties in Holland Road Shopping Centre ‘are likely to experience capital and rental appreciation’ with Holland Village MRT station scheduled to open next door in 2011.

Source: Business Times, 15 Jul 2010

Two key factors – large-scale government land sales on the boil and a prime segment stuck in the doldrums – will keep a cap on the sort of ‘en bloc’ mania seen in 2007.

But property experts say the market for such sales has certainly improved this year, especially among smaller developers, and that is energising more owners keen to sell.

Credo Real Estate says there have been 16 collective sales worth $786million completed this year, compared with one last year and eight in 2008.

Consultants expect more launches over the coming months as many estates which initiated the long sales process around last year or early this year will be ready to go to market.

Last week, Villa D’Este in Dalvey Road was launched for sale at a guide price of $115million, or about $2,343 per sq ft per plot ratio (psf ppr).

And Melrose Court, off Balestier Road, was put up for sale yesterday with a guide price of $48million, or about $688 psf ppr, inclusive of a $2.38million development charge.

Consultants said they have been fielding a steady stream of inquiries from potential collective sellers over the past six to nine months.

As in the past, such inquiries pick up whenever news of a successful collective sale hits the headlines.

‘More launches and sales will come but a lot also depends on owners’ expectations. It’s whether they think they can get a similar replacement property with the en bloc premium,’ said Colliers International’s executive director of investment sales, Mr Ho Eng Joo.

Experts noted that there is a price mismatch in the prime sector, with owners’ expectations higher than what the major developers, who are still cautious, are willing to pay.

As for buyers, they are keen to buy freehold land in collective sales because it is not available from the Government, they said.

The Government’s land sales programme comprises large 99-year leasehold sites targeted at the mass market. Unlike a collective sale, a government land purchase is straightforward and fast.

Experts say small- and mid-sized private developers still need to replenish their land banks and they cannot afford the big government sites coming up for sale.

Indeed, the collective sale deals completed this year were all done by boutique developers. Apart from the recently concluded $137million sale of Meng Garden Apartments off Killiney Road, the other deals were all priced below $100million.

The recent successful collective sales are in mostly attractive city-fringe areas such as Balestier, or areas where no government sites will be offered for sale, said Mr Ho.

Credo Real Estate managing director Karamjit Singh expects to see more medium-sized sites of around $100million sold in the collective-sale market this year rather than large sites.

‘Between now and December, there may be another 20 or so successful deals but these are likely to be small sites meant for small-sized units of several hundred square feet,’ said Mr Jeffrey Goh, head of investment sales at HSR International.

‘Smaller sites priced below $100million have a higher chance of success than prime ones priced above that amount.’

The flats on these sites are usually quite old, with owners who are thus more realistic about price, he said. That makes it easier to obtain the 80per cent approval for the sale to proceed.

New mass market launches may be going for benchmark prices but sellers in collective-sale deals can find better value in the resale market for replacing their homes, said Mr Singh. Also, a lower- priced site would attract a bigger pool of buyers than a higher-priced one, said Mr Ho. ‘The risks are manageable.’

Source: Straits Times, 15 Jul 2010