Enbloc sales: Still going according to plan

Source : Today – 23 Jul 2010

Despite changes in the Land Strata Titles Act, developments are continuing their en bloc runs

Property owners with en bloc sale aspirations seem unfazed by the new provisions to the Land Strata Titles Act which took effect last week as a number of them are still proceeding with their collective sales as planned.

Developments such as Allsworth Park, Mayfair Gardens, Thomson View and Shenton House are among those continuing their en bloc runs and have elected sales committees.

Analysts are also expecting between 20 to 40 en bloc launches for the rest of the year with an average deal value of between $50 million and $100 million.

Things are also looking smooth for Laguna Park, whose new sales committee has appointed Knight Frank as marketing agent and Khattar Wong as lawyer.

Laguna Park dwellers are looking to open for tender by the first quarter of next year, a resident told MediaCorp.

Market watchers also expect several smaller developments with fewer than 50 units to be en bloc ready by year end.

The latest amendments in the Land Strata Titles Act have won the approval of marketing agents and residents who believe the provisions will help prevent a lengthy and convoluted en bloc process.

In particular, they laud the recommendation to raise the requisition rate to reconvene another extraordinary general meeting to 50 per cent of share value or total number of residents.

That is higher than the previous 20 per cent of share value or 25 per cent of the total number of owners required and will apply to homeowners who failed their initial attempt at an en bloc sale.

The Ministry of Law said the new provision is to discourage numerous en bloc tries if there is insufficient interest from homeowners.

Some changes in the Land Strata Titles Act – such as the two-year restriction if a first attempt fails – should help en bloc sellers to time their sale in a property upswing and increase their odds at pocketing larger profits.

“Collective sales should be moving along swiftly as it is now or never for them,” said Ms Christina Sim, director of investment at Cushman and Wakefield.

“For the property agents, they know they are embarking on something serious and the chances of it coming to fruition are better,” she added.

However, property analysts believe that with more launches expected in the second half of this year, this may result in a developers’ market.

This means that with the onset of launches, developers will have more to choose from and sellers will have to keep their prices competitive and “realistic”, said Ms Sim.

“With the buffet spread of collective sales coming up, and with the limited spending power from developers, the sites have to be priced realistically to meet the balance between market demand and residents’ needs,” she explained.

Just this month, tenders for two en bloc sites were completed with the People’s Mansion in Lorong 31 Geylang selling for $42.68 million, and Meng Garden Apartments in Killiney Road going for $137 million.

This week, CBRE launched the en bloc sale of Holland Tower with an indicative asking price of $68 million.

“The 13 en bloc deals in the first half of the year were relatively small, averaging at $40 million,” said Mr Karamjit Singh, managing director of Credo Real Estate.

He also expects 20 to 40 en bloc launches in the second half, mainly medium sized projects and a handful of large ones.