Collective sale of Dalvey Road apartment

The latest condominium to climb on the en bloc bandwagon is the Villa D’Este on Dalvey Road in prime district 10. The freehold site currently holds 12 apartment units ranging from 3,456 sq ft to 3,949 sq ft and 10 owners have already agreed to putting the site up for sale. And the asking price? $96 million.

Villa DesteThe pros for this site is that there are no development charges and with the $96 million price tag it comes with, that works out to be about $1,730 psf for the 55,480 sq ft land site. Land acquisition moves by developers have been aggressive this year and quite a few collective sales efforts have come to fruition and more mature residential establishments are feeling confident about putting themselves out there.

Other properties which have started their en bloc sales process recently are The Albracca, Serangoon Ville and Tampines Court with the latter 2 being former HUDCs. The Villa D’Este is a private property with relatively few units on site, which could mean each owner getting $7.5 to $8 million from the sale. And its location would attract developers since it is rare to find a site so close to a Good Class Bungalow (GCB) area. This could translate to promising sales of projects eventually launched here as the area is popular with expatriates and also provides the exclusivity of ambience and address. Other private land plots which were sold this year included One Tree Hill Gardens, Goh & Goh Building, Rio Casa and Eunosville.

The Dalvey Road site holds the potential to yield 1 to 3 GCBs or 24 new apartment units sized approximately at 2,000 sq ft. There was a previous collective sale attempt in 2015 for $115 million.

En bloc sales take centre stage this year

Yet another former HUDC estate has been put up for collective sale. Serangoon Ville situated in Serangoon Ave 1 has been made available for en bloc sale and the selling price is expected to be between $400 million and $430 million. The costs will be high for this land site as an additional $200 million to $220 million is required to intensify the land and to refresh the land lease by 99 years. The estate was privatised only in 2014 and has 69 years of lease left.

SerangoonVillePhoto credit: Google Maps Singapore

Property players and watchers are expecting developers to bid efficiently for this land site that averages out to be $720 psf per plot ratio, particularly since recent sales of ex-HUDCs such as Eunosville and Rio Casa were closed successfully and above asking prices. Currently, Serangoon Ville houses 7 blocks of 244 apartment units, including some maisonettes, with sizes ranging between 1,625 sq ft and 1, 733 sq ft. One redeveloped, the 296,913 sq ft plot could potentially yield 750 to 900 units.

2 other former HUDCs – Tampines Court and Florence Regency – are already in the process of putting their estates up for sale. The latter is planning to commence signing of their collective sale agreement in July this year. This year’s healthy new home sales has possibly boosted developers’ confidence in the market’s stabilisation and future recovery.

But with the number of private land sites being sold and private estates sold en bloc, one cannot but help to wonder how Singapore’s real estate sector will look like in 3 to 4 years’ time. Add the Bidadari township into the mix, the market might be seeing a huge entry of public and private housing within the next 5 years. Rents have been sliding due to the increased number of completed and available properties in the recent couple of years, how will the market react then?

2 more HUDCs try their hand at en bloc sales

On the back of successful collective sales this year, 2 more private residential developments are trying their hand at the process. Tampines Court and Florence Regency are both previous HUDCs, similar to the 2 other properties which sold recently – Rio Casa and Eunosville.

TampinesCourtThe lack of land sites made available under the government land sales (GLS) programme may be the reason behind the success of these recent en bloc sales. Developers’ hunger for land has been reflected in the the high prices paid for recent en bloc deals, and the latter could also be precisely what is bolstering the courage of residents of Tampines Court and Florence Regency.

There are a total 18 HUDC projects built since the 1970s and all have been privatised, with 9 sold thus far, including Shunfu Ville and Raintree Gardens last year. Shunfu Ville could essentially be what got the en bloc ball rolling and more successes were recorded this year. Rio Casa sold for $575 million and Eunosville for $765 million.

RioCasaHUDC HougangFlorence Regency is situated in H0ugang and has a land area of 389,000 sq ft. While it is still in the early stages of the en bloc process, Tampines Court on the other hand already has secured consent from 82 per cent of its residents. The asking price is currently set at $960 million for the 702,000 sq ft plot. At the moment, the property holds 432 maisonettes and 125 apartments. This is however not their first attempt at the collective sale process. The first attempt at $408 million was in 2008 and the second attempt in 2011. Property analysts expect home owners to seek higher prices following recent successes, but also warn against pricing too high as it may discourage developers from bidding.

Success of collective sales continues

2017 continues to be a good year for the collective sales market with Shunfu Ville given the go-ahead from the Court of Appeal last week and the sale of One Tree Hill Gardens site for $65 million this year.

OneTreeHillGardensThe Lum Chang Group has purchased the latter freehold landed residential development site near Orchard Road at $1,644 psf. Its proximity to Orchard Road makes it a prime site that is rare also because of its freehold status. It is of sizeable land ratio and developers have expressed considerable interest. The site was initially put up for sale at $72.8 million. Despite the $7.2 million shortfall, individual owners of the 6 maisonettes and 7 apartments will still receive $4.3 to $9.1 million depending on the size of their units.

Under a 2014 masterplan, the freehold site is zoned for 2-storey semi-detached residential use within a 39,063 sq ft land area. What it could potentially yield are 8 semi-detached houses, 5 bungalows or 10 semi-detached homes and 3 bungalows. With such landed properties near Orchard Road a scarcity, the freehold homes will no doubt receive much interest from investors and high net-worth buyers.

venturaheightsWhile the market is still tender from the previous years of slow growth, developers are beginning to replenish land stock and collective sales may be their means to the ends as the government has recently cut back on the release of land plots. Though price-sensitivity continues to rule developers’ bids, the collective sale market will be active this year especially with more home owners enquiring about en bloc sales and the sale of Eunosville and Rio Casa last month.

$653 million asking price makes Eunosville largest collective sale

Should the asking price of between $643 to $653 million for the HUDC estate of Eunosville truly go through, it would be the largest collective sale of late as it surpasses the $638 million paid for Shunfuville last year and the expected $450.8 million asking price for Rio Casa in Hougang which went on sale last month.

EunosvilleAnd it would mean each unit owner at the Sims Avenue estate would receive $780 to $790 psf or $1.9 to $2 million approximately. The estate has already reached the 80 per cent requirement for consent and the sheer size of the estate would be a dream for the winning developer. The 376, 713 sq ft site currently holds 225 maisonettes in 10 blocks and upon redevelopment, could yield 1,035 units of approximately 90 sq m each.

With 70 years left on its lease, $181 million on top of the bid will be required for intensification and a new 99-year lease. The site is just 100 metres away from the Eunos MRT station and strong showings at recent property launches show that buyers are still keen on new launches at good locations. Recent sales at Grandeur Park were a good example. All 420 of the units available at the launch were sold with the first weekend at the average price of $1,350 psf.

GrandeurParkResidencesThough bidding will be prudent as developers are keenly aware of the completion and sales deadlines imposed by the qualifying certificate and additional buyer’s stamp duty, some may be willing to put more into sites with long-term potential as land banks have been running low for the past year or so.

More collective sales in the pipelines?

Following the successful en bloc sale of Shunfu Ville, the property market is once again energised. It has reignited the fire for some developments which have been unsuccessful with previous collective sale attempts, while also pushing some properties to reach out to property firms and developers for quotes. The minimum approval for a property to be sold en bloc is 80 per cent.

TheCapriAt a former HUDC in Potong Pasir Avenue 1, blocks 110 to 112, 60 per cent approval has already been secured. Another similar HUDC property in Tampines have begun drafting a sale agreement while Eunosville on Sims Avenue is also looking to restart the collective sale process. As most of these HUDCs are older establishments in mature estates, their potential value may heavily outweigh the units’  current condition and value.

ShunfuVilleThe recent collective sale of Shunfu Ville garnered each owner an average of $1.78 million each, that is almost 50 per cent more than what each unit would have received when sold individually in the current market. Other properties which are also trying their hand at the process are Changi Garden and The Capri. In the commercial property realm, Katong Shopping Centre has reached the 80 per cent minimum approval criteria and will be launching the site for sale soon.

To balance off the government’s recent diminished land sales, these private collective sales could be attractive to developers looking for an opportune time to  strike it out in the market.