Property News!

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Residential site next to Kovan MRT may fetch up to S$265m: CBRE
07 August 2007 2045 hrs


SINGAPORE : The Urban Redevelopment Authority (URA) has put up a 1.8 hectare leasehold residential site at Simon Road for sale by public tender.

The land parcel is one of the 10 confirmed list sites under the Government Land Sales Programme for the second half of 2007.

Located next to the Kovan MRT station, the parcel has a maximum permissible gross floor area of under 62,000 square metres.

According to property consultant ** Richard Ellis (CBRE), the site may see bids of between S$232 million and S$265 million.

This will translate to a land cost of between $350 and $400 per square foot per plot ratio.

CBRE expects units in the new condominium to be sold at between $750 and $800 per square foot when it is launched next year.

The tender will close at noon on 2 October 2007. - CNA

 

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Aug 8, 2007
Govt should intervene in property market
NATIONAL Development Minister Mah Bow Tan said on TV last week that the Government does not need to intervene in the property market yet, because prices have not risen to 1996 levels. I disagree. In that year, we were forced to leave our home because of an en-bloc sale. We spent many months looking for a replacement flat. At that time an HDB executive maisonette in Bishan was going for $650,000; a Lakeview HUDC unit, $800,000; and one at Braddell View, $640,000. A private freehold flat of 1,600 sq feet in Devonshire Road was advertised at $1.05 million while a Cavenagh Court high-floor unit was selling for $750,000.
We are now obliged to find a new home again. HDB five-room flats and executive maisonettes are going for over $750,000; the point blocks near the Farrer Road market, $800,000; Braddell View is now being offered for $1.25 million. Private 99-year-leasehold property like Queens on Commonwealth Avenue are priced at $1.1 million, while prime developments like the one at Orchard Turn opposite Tangs are being booked at over $4,000 per sq ft. All these are way above the 1996 prices.

Thousands are being turned out of their homes because of the en-bloc craze. The money paid to us means either a downgrade or a move to the very borders of Singapore. It is time for government intervention.


Lucy Huang (Ms)

 

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Aug 9, 2007
20 per cent threshold to stop en-bloc sale illogical
HAVING read Mr Gene Chia Choon Hwee's misgivings in his letter, 'En-bloc sale frenzy: Concerns of a home owner in Singapore' (Online forum, Aug 6).
Allow me to offer my comments as another concerned resident living where a group is strenuously engaged in pressing for an en-bloc sale.

We live in a private estate which is regarded as being almost unique in design in Singapore, but the group is keen to pre-empt impending changes in the pipeline in government rules on en-bloc sales.

For the average Singaporean, the purchase of a property, whether in public or in private housing, is the biggest single investment of one's lifetime, made with the primary intention of having a roof over one's head, with little thought of profit, or even notional loss when the property market goes off the boil.

In our case, the price of the property we purchased dropped by as much as 30 per cent in a couple of years. This is unlike investment in the stock market where shares can be re-purchased with profit.

The empirical evidence in the case of en-bloc sales is that not many sellers are happy with the subsequent relocation, mostly in new quarters which compare unfavourably with where they were previously living. A lot of the extra cash that was supposedly the incentive for selling will go towards renovation of their new home.

Intending sellers fail to recognise that the ease with which they can sell their property must necessarily mean that they will find it correspondingly difficulty in acquiring another.

While the Government may be disinclined to interfere in the property market, one area where it should step in, and urgently, is in the rules presently governing en-bloc sales, which require 20 per cent non-assent to stop the process.

There is plenty of room to argue that this goes against the principle of 'minority rights' which need to be protected, even if not zealously, then at least adequately.

In the corporate scene, minorities can continue to retain their stakes unless the volume is less than 10 per cent.

What is significantly so different between property and stocks for the difference to be double?

In fact, taking into consideration the reality that a property is an investment bought with a long-term view in mind, for continued occupation and not for profit, the 20 per cent threshold seems illogical.

The Government should relook this formula and revise it.

Narayana Narayana

 

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Aug 9, 2007
Family feuds over real estate show money is root of all evil
I READ with sadness the article, 'Families feud over real estate in red hot market' (The Sunday Times, Aug 5).
The current property frenzy has reduced kinship to the level of dollars and cents. Blood relationships count for nothing when there are millions of dollars at stake.

Mother sues son, brothers sue one another, wife sues husband, children sue their parents - the list goes on. Our society has indeed placed materialism at the top of their priority list.

I remember a similar incident happened to my mother's family when my dead uncle left behind a private home worth close to $2 million more than 10 years ago.

There was much friction as there was no will and there was also a dispute on the valuation of the property. There was much distrust with each other and a cold war soon ensued.

Naturally, relationships soured among the siblings. The yearly mass gathering during Chinese New Year soon dwindled and vanished altogether. The distribution of the estate was delayed and the wait was also costly as the property market soon nosedived. The lawyers handling the estate also had a hard time trying to persuade all parties to come to a reasonable settlement.

Soon, one by one, my uncles and aunties died within a short 10-year period due to old age or sickness. Sad to say, some of the relatives' funerals were badly attended as the news was not even relayed to us. Although some of the relatives were enriched by a few hundred thousand dollars later after settlement, they could not live through their old age happily and in unison.

I find the whole episode very sad and discouraging. For having played together as children happily under one big roof, the ending for most of them was one of division and estrangement. Some brothers could not even bade a final farewell to their sisters when they passed away. The love of money perhaps is the root of all evil.

Gilbert Goh Keow Wah

 

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Aug 9, 2007
Horizon Towers sellers debate possible options
They have ignored yesterday's deadline imposed by buyers' lawyers
By Joyce Teo
THE row over the thwarted Horizon Towers collective sale remains in limbo today after owners spent last night meeting lawyers to thrash out a course of action.
They ignored a 3pm deadline yesterday imposed by the estate's thwarted buyers and will meet again today as they try to grapple with the threat of a $1 billion lawsuit.

The buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - have threatened to sue the sellers if they do not respond to their demands.

'We're still in discussions with our lawyers on what step to take next,' said the deputy chairman of the condominium's sales committee, Ms Doreen Siow.

But there was an air of defiance emerging from the ranks of owners yesterday.

The owners know the legal deadline for the sale expires on Saturday so they have until then to decide on their next move.

They have also dismissed the buyers' claims that they have not fulfilled their side of the sale contract.

'Our lawyers, Tan, Rajah & Cheah, have denied allegations of any breach of contract,' said Ms Siow.

The spiralling legal row was ignited last Friday when the Strata Titles Board (STB) axed the sale application for the Leonie Hill condominium, citing procedural errors.

It seemed the last act in a bitter row that began in February when the buyers inked the deal to buy the estate for $500 million.

But on Monday, the buyers made certain demands including asking the sellers to apply to extend the sale deadline from Saturday to allow a new application to go to the STB.

The sellers were also told that they could ask the High Court to reconsider the STB ruling.

But there was a sting in the tail: legal firm Allen & Gledhill, which is acting for the buyers, said the owners of 173 units who voted for the sale could be sued for lost profits of between $800 million and $1 billion. That works out to as much as $5.78 million per unit on average.

Senior Counsel K.Shanmugam, of Allen & Gledhill, said HPL, a listed firm, is answerable to investors and is facing a substantial loss.

The owners are likely weighing three obvious options. One is to extend the sale deadline and make a new application. The second option is to extend the deadline and appeal to the High Court over the STB ruling.

But these will mean the sale proceeding at the original price struck in February, one that looks low in today's rising market.

Their $500 million price - which is also the reserve price agreed on last year - works out to about $815 per sq ft (psf) of potential gross floor area. The Grangeford estate nearby was recently sold for $1,820 psf.

The third option is to do nothing, which essentially leaves the buyers in a position to carry out their threat to sue for the lost profits of $800 million to $1 billion.

It is a huge sum but not out of sync with the booming property market, industry observers say.

Meanwhile, all sides are awaiting the STB's explanation of its decision, which will be out 'in due course'.

This would help the owners decide whether it is worthwhile appealing against the ruling.

The sellers' lawyers and marketing agent First Tree Properties could also be in the firing line as the owners could counter-sue them for not getting the paperwork right, said an observer. 'The case shows that there's no incentive to be a consenting owner as you can end up being a potential defendant.'

A lawyer who declined to be named said it may scare off owners and kill the booming collective sale market.

Another observer said: 'It's a big Pandora's box.'

 

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Aug 10, 2007
En-bloc sales: What happened to fair treatment and rights of minorities?
I READ the letter, 'Govt should intervene in property market' (ST, Aug 8), and it strikes a chord.
I am also one of the thousands who are being turned out of our homes because of the en-bloc frenzy.

Being forced to seek legal advice, we were told that the only protection that we have by law is that we will minimally get what we paid for our home 10 years ago without bank interest.

We have spent weeks searching for a new home in frustration and realised that we too can only downgrade or move to the very borders of Singapore.

Many of us own a home. If someone walks in through your door today and demands that you exchange your home in Central location with his in Choa Chu Kang, how would you feel?

If someone demands that you sell your house at the price you paid for 10 years ago without bank interest for the mortgage that you have arduously serviced over the years, what would you do?

You can throw the person out the door. Yet, this is exactly what some minority owners in en-bloc sales are forced to accept, without choice.

It is ironical that, as a Singaporean who has worked hard to own our home in this land, I am made to ponder the prospect of losing our home and wonder, in the name of facilitating en-bloc sales and supposed progress of the nation, what has happened to fair treatment and the rights of individual Singaporeans?

Jane Ee (Ms)

 

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Aug 11, 2007
Horizon Towers sellers in meetings as deadline looms
They will have to decide by today whether to bow to thwarted buyers' demands, or face being sued by them
By Joyce Teo
ANOTHER day, another set of meetings with lawyers, with no end in sight for the sellers of Horizon Towers but time is fast running out.
The deadline for the aborted sale is today, which means the sellers must decide on a course of action in the face of a $1 billion lawsuit from the intended buyers. But no decision has been made, despite lengthy meetings that went on long into the night.

The Horizon Towers collective sale debacle began last Friday when the Strata Titles Board (STB) halted its sale application on technical grounds. The buyers want the sellers to extend the deadline for four months from today and then file a new sale application with the authorities or appeal to the High Court to reconsider STB's decision. But that could mean selling the Leonie Hill estate at the $500 million price inked in February.

Prices have rocketed since then and the sellers are not keen to extend the deadline just to see their homes sold at what most now feel are bargain basement prices.

The intended buyers - Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority - have threatened to sue the sellers for alleged breach of the contract inked in February.

They also told the owners of 173 units who voted for the sale that they could be sued for lost profits of between $800 million and $1 billion. This works out to as much as $5.78 million per unit on average.

'It's quite shocking that they would take such a drastic step,' said a 27-year-old resident. 'We are just a bunch of innocent people who had the intention of going through with the sale.

Mr Victor Ow, 53, agreed: 'Even though we signed the contract at a lower price, we were prepared to honour it until the STB's decision.'

The amount the buyers want to claim from each seller is way above the $2.3 million that each of the 199 units would have received from the $500 million sale. Each of the 11 penthouses would have pocketed $4 million or more. Horizon Towers has a 99-year lease.

'Whether the sellers are liable, that is arguable,' said a legal industry observer. 'Potentially, the people who may be liable will be the marketing agent, sales committee and the lawyer, depending on the latter's scope of instruction.

Horizon Towers' marketing agent, First Tree Properties, took on the job without seeking a commission from the sellers, whom it was representing. In an unusual move, it was instead going to take a cut from the buyers.

But a typical collective sale agreement would have a provision that appoints the marketing agent and another authorising the sales committee to act on the sellers' behalf.

joyceteo@sph.com.sg

 

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Aug 11, 2007
Horizon Towers residents caught in a fix
WORRIED, disappointed, victimised and weary - these words probably best capture what owners of Horizon Towers units have felt over the past roller-coaster of a week.
However, even before the threat of a lawsuit emerged, what seemed to be a sweet victory - the prospect of securing a higher sale price in line with current market valuations - did not cheer all residents.

Some, like Mr Foo Suan Pin, had already committed themselves financially to another property.

Since the contract had been signed, Mr Foo thought it safe to assume that it was a done deal. So the director of a computer software firm purchased a semi-detached house at Mount Sinai for his wife and himself.

Now, the sale has been aborted, but Mr Foo still has to service the loan for his new $2.5 million home.

He is not the only Horizon Towers resident caught in a fix.

Another owner Mr L. Tan, a businessman in his fifties, purchased a 1,600 sq ft condominium unit currently priced at $2.5 million in anticipation of his move-out.

But because things are 'in limbo at the moment, nothing can be done', he said.

With the threat of a lawsuit though, the issue has gone beyond money.

Many expressed incredulity at the sum they might be liable for - $5.78 million each - but even greater was the sense of them being, in Mr Tan's words, ' innocent bystanders'.

 

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Aug 12, 2007
EN BLOC SAGA
Horizon Towers sale deadline expires
Owners will not extend sale deadline but will appeal against STB's dismissal of the sale
By Elena Chong
THE legal battle over the Horizon Towers collective sale entered a new stage when majority owners decided not to extend the sale agreement that expired yesterday.
Instead, the sales committee will appeal against the Aug 3 decision of the Strata Titles Board (STB) dismissing the $500 million sale on technical grounds.

If the appeal succeeds, another sale application can be made to the STB, but not under the terms - and price - of the old agreement as that died yesterday.

Yesterday's decision - after two days of intense legal meetings - could also fend off a threatened lawsuit from the intended owners, Hotel Properties Limited (HPL), Morgan Stanley Real Estate and Qatar Investment Authority.

Committee member Joyce Tan said last night: 'We heard many views from home owners who are anxious over the prospect of litigation.

'The feeling was that they did not do anything wrong, but they are faced with potential lawsuits with huge claims against them.'

The intended buyers have threatened to sue the majority owners for lost profits - estimated at between $800 million and $1 billion - from the project that would have been built on the Leonie Hill site.

They also wanted the sale deadline extended by four months and the STB decision appealed. Both moves could have cleared the way for the sale to go ahead - but at the original $500 million price many owners now feel is inadequate.

If the sales committee's appeal succeeds, it will re-submit its sale application.

It is not clear why the committee decided against an extension, but it hopes that its appeal will show that it cannot be faulted for not getting the paperwork right.

But if it wins the appeal, Horizon Towers cannot be sold to the HPL group under the existing agreement as it lapsed yesterday.

Owners will be back to square one and have to negotiate a new deal, and presumably a higher price.

The Grangeford next door was sold en bloc earlier this month at double the asking price per square foot (psf) achieved by Horizon Towers in February.

Many owners realised earlier this year that they had sold at a bargain price and even those who signed the sales agreement ended up backing the minority owners in their bid to unwind the deal.

If the sale had gone through, the owners of the 199 flats would have pocketed $2.3 million while the 11 penthouse owners would have walked away with $4 million or more each.

elena@sph.com.sg



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LITIGATION WORRIES'We heard many views from home owners who are anxious over the prospect of litigation. The feeling was that they did not do anything wrong but they are faced with potential lawsuits with huge claims against them.'
MS JOYCE TAN, Horizon Towers sales committee member

 

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Aug 13, 2007
En bloc sale: Work starts even before all move out
AMID all the stories on collective property sales readers of The Straits Times have come across, mine in Balmoral View has a twist.
The developer has moved in equipment to build a showflat even though seven units of this 22-unit condo are still occupied.

It means we cannot use the visitors' carpark and the recreation areas, apart from having to tolerate the dirty swimming pool, noise and dust. In the meantime, we are still billed for monthly maintenance.

Yes, our condo was an early bird in the 'en bloc wave', and prices paid to unit owners were low compared to the current level. We accepted the deal, and the last unit must be vacated by November.

But what right has the developer to rush in before everyone moves out?

Some to-ing and fro-ing with Building and Construction Authority officials revealed that, although the deal was completed in May, the developer had already applied for and got the necessary approvals from the Urban Redevelopment Authority (URA) to build a showflat in February last year.

Did the URA check with the Strata Titles Board on the legality of such a move, given that there are residents who do not need to move out until November?

By mid-June, heavy construction equipment was moved in and the construction of the showflat is now in earnest. The recreation area has been cordoned off.

Also, I see obvious safety concerns with children playing in the compound, especially with wooden scaffolding less than a couple of metres from the swimming pool.

I understand the developer's haste to catch the hot property market but this is at the expense of residents still living on the estate.

Can the authorities enlighten us on this unsatisfactory situation?


Chio Tan Seng

 

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Aug 13, 2007
West Coast condo sold out in less than two weeks
Buyers pay average of $880 psf for the 659 units at The Parc project
By Joyce Teo
ALL 659 units of The Parc Condominium in West Coast Walk have been snapped up in less than a fortnight since the start of the month.
Prices for the freehold 24-storey condominium went as high as $1,040 per sq ft (psf) for several coveted high-floor units.

Overall, the apartments were sold at $880 psf on average, having risen from an average of about $820 psf at the start of sales.

Collective sale sellers of the former Westpeak condominium, on whose site The Parc now stands, got the first bite of the cherry on July 31. Other buyers joined in later.

The last unit was taken up by 6pm on Saturday, after which sales staff of the condominium's sole marketing agent, Savills Singapore, threw a celebratory party at the show-flat.

The most common type of unit are three-bedders, ranging from 1,216 to 1,302 sq ft. There are 282 of them, or nearly 43 per cent of all homes. The condominium also has apartments as small as 667 sq ft and three penthouses at about 3,681 sq ft each in size.

Buyers were mostly Singaporeans, with foreigners making up less than 20 per cent of the purchasers, said the firm's managing director, Mr Michael Ng.

The Singaporean buyers included young families and older people looking for retirement homes or homes for their children, he said. Foreign buyers included those from Hong Kong and Indonesia, he added.

Developed by construction and property group Chip Eng Seng and a Lehman Brothers unit, The Parc is near Clementi town centre and a short drive away from the National University of Singapore, Singapore Polytechnic, Singapore Science Park and one-north in Buona Vista.

Savills said professionals and lecturers from these places are potential tenants. The condominium features recreational facilities such as a 50m lap pool, jacuzzi and a toddlers' pool on a relatively large site of 366,432 sq ft.

Chip Eng Seng bought Westpeak in a collective sale last April for $206.09 million, which worked out to $348 psf of potential gross floor area, inclusive of a development charge then estimated at $21.5 million.

Lehman Brothers came in for an equal share of the project last October.

Meanwhile, Chip Eng Seng soft-launched a high-end project with about 70 units in Peck Hay Road, near Cairnhill Circle, about a month ago.

It has since sold close to 50 per cent of the development - which sits on the former Venus Mansion site - at about $2,500 psf on average.

Next up for the developer will be the launch of a small, luxury condominium in Grange Road.

 

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Devonshire Lodge owner plans legal action against en bloc sale

14 August 2007 2253 hrs

SINGAPORE: Even before the dust settles on the Horizon Towers saga, the sole unit owner objecting against Devonshire Lodge's collective sale has decided to seek legal action to break the deal.

All the owners, except Mr Jeffrey Lai, had agreed to sell the 27-unit Devonshire Lodge en bloc for $37.2 million.

Mr Lai said he would hire a lawyer to fight the case.

And some owners who had signed the sales agreement are now having second thoughts.

Mr Lai said: "Roughly, each unit will get about $1.5 million. For the smaller unit, they are getting $1 million plus. I won't say that they are getting less or whatever, but at least we want to know that it's a fair valuation when they sell the property, that's all."

The next step, Mr Lai said, is to wait for an independent valuation report which should be ready by the end of the month.

This report will then be submitted to the Strata Titles Board as part of an application against the deal and to set a hearing date to present his case.

When contacted, Toh Tan & Partners, the law firm representing the majority of the owners, said it was unable to comment as the matter is set to go under judgement.

Meanwhile the buyer, developer Evan Lim & Co, said the deal was negotiated at market rate then.

The Strata Titles Board said that to date, there are only three cases where an en bloc transaction has been blocked.

Industry watchers said the typical issues raised by objectors relate to sales process and valuation, which can be subjective.

Nicholas Mak, a property analyst at Knight Frank, said: "In a market where prices are changing almost every month or every quarter, the valuation report may become a bit outdated a couple of months later, so it will help in the beginning to give the residents a certain idea, an independent opinion on the value of their property. But they must act upon that information that is received. If they want to use valuation, they may have to do an update of the valuation report a bit later."

Harry Elias Partnership's Philip Fong said: "For the valuation itself, it doesn't mean that just because it's lower than the fair market price, there is automatically bad faith or lack of good faith. There has to be inadequate marketing, or they have to show that the sale was rushed into, or there was suppression of facts. So, these are limited grounds."

To compound the problems, Mr Fong said, minority dissenters are usually not privy to what went on during meetings to discuss the sale of a property.

They also do not have easy access to the sales committee and documents.

Still, it does not mean they do not have a case.

It all depends on the merit of the case.

Under the Land Titles Act, apart from technical objections, they can also object on the basis of financial loss

 

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URA July home sales figures show continued price rise

15 August 2007 2114 hrs

SINGAPORE: More private homes were sold in July, compared to the month before, and at higher prices as well, according to the latest data from the Urban Redevelopment Authority (URA).

Analysts are, however, predicting a slower month of August due to uncertainties in the financial markets caused by the US sub-prime crisis, coupled with the traditionally slow Hungry Ghost Month.

The latest private home sales data showed that 1,378 new units were sold last month, nearly 20 per cent more than in June. And over 70 per cent of the projects sold over the past two months fetched higher median prices in July.

"The prices were on the whole better, and the volumes were also better. It's consistent with the trend of the last quarter and it reflects the fact that Singapore is doing quite well selling itself a place to invest,” says Colin Tan, head of research from Chesterton International.

“In this current up-cycle, I think there has been more investment buying rather than speculative buying because we do not hear of so many stories of people buying properties, and then maybe flipping it within a week," he continues.

Analysts also point out that an increasing number of apartments are now fetching more than S$4,000 per square foot, a benchmark price hardly seen before this year.

According to property consultancy Knight Frank, 73 such units were sold in July, compared to the 16 sold in June, at projects such as Scotts Square and The Orchard Residences.

A unit at The Marq on Paterson Hill fetched the highest price thus far, at S$5,100 per square foot.

But market watchers say August is likely to see a dip in the numbers of units sold.

"Looking forward in August, I think the numbers will probably be more subdued, due to a lesser number of projects that will be launched, (with) August traditionally being the Lunar Ghost Month, as well as the US sub-prime situation that has affected both the stock markets and some sentiments in the property market," says Dennis Yeo, managing director of Colliers International.

Private home prices have overall risen some 13 per cent in the first six months of this year.

The URA started putting out more comprehensive sales data last month, in a bid to bring greater transparency to the property market. These figures are now updated on the 15th of every month. - CNA/ac

 

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Hungry Ghosts may spook property boom

16 August 2007 0633 hrs

The subprime crisis half a world away — coupled with the Hungry Ghost Festival in Asia — may mean a quieter month for property agents in Singapore.

August — traditionally a slower month because of superstitious house-buyers — will be hit by the double whammy of poor purchasing sentiment that's spilling over from the US because of the subprime saga, said analysts.

Developers are likely to delay launching condo projects as they wait for the jittery stock markets to settle, said Mr Nicholas Mak, Knight Frank's director of consultancy and research.

This was also what happened during the February/March stock market correction, he noted. "The market correction in February did not present any systemic risk, but this time round with the subprime issue popping up now and then, it appears the market is more volatile, and that can make developers more cautious.

"If you look at the number of property advertisements that usually appear mid-week for launches on the weekends, it now appears to be very quiet," he pointed out.

Already, Singapore property mogul Kwek Leng Beng is reportedly seeing some foreign investors deferring their purchases on concerns over the subprime mortgage woes.

This cooling down period comes after a month of stellar private home sales in July.

The latest Urban Redevelopment Authority (URA) figures on the sale of new private homes showed 1,378 units, or almost 20 per cent more units, were sold in July compared to that of a month earlier.

Overall, the median price achieved for a unit in July was $1,609 per square foot (psf), a 22.2 per cent increase from the previous month's $1,317psf.

The figures, released on Wednesday, are the second update since the URA first started unveiling more comprehensive data last month to inject more transparency to the market.

Most interestingly, it showed that the number of units sold above $4,000 psf soared by more than 356 per cent to a new record of 72 units, compared to just 16 units in June.

"This is a significant milestone in the evolution of Singapore's private residential market given that before June 2007, units that were sold above $4000 psf were almost non-existent in Singapore," said Mr Mak.

The super-luxurious Scotts Square development alone posted 150 sales, of which 64 were sold at between $4,000 psf and $4,499 psf, with the remaining 86 units sold between $3,500 psf and $3999 psf.

The Marq On Paterson Hill scored $4,044 psf in June and $4943 psf in July - the highest median price achieved in the two consecutive months.

Other properties in the $4,000 psf-club includes The Orchard Residences and Cliveden at Grange.

Said Colin Tan, head of research, Chesterton International: "The prices were on the whole better, and the volumes were also better. It's consistent with the trend of the last quarter and it reflects the fact that Singapore is doing quite well selling itself a place to invest."

Overall, private home prices have risen some 13 per cent in the first six months of this year.

"In this current up-cycle, I think there has been more investment buying rather than speculative buying. Because we do not hear of so many stories of people buying properties, and then maybe flipping it within a week," he added.

And while the number of new private homes transactions may slow down this month, analysts don't expect prices to go down as well.

"It will probably show up as lower sales volumes rather than lower prices," said Mr Tan, "The gestation period of property development in general is about two years, so prices will be a little sticky coming down. Developers are not likely to rush to lower prices at the slightest problem."

 

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En bloc sellers should be aware of powers of sales committee

SINGAPORE : Owners should understand the collective sales process and the powers bestowed on their sales committee right from the start.

This will help minimise potential problems arising from an en bloc deal.

Dissenting views among home owners are common.

The Strata Titles Board received 45 en bloc applications in the first half of 2007 - 4 were resolved after mediation, another 4 set for hearing, and 24 others pending.

10 applications went for collective sales order uncontested, and 3 were withdrawn.

The usual grouses include apportionment of payout and valuation of the property.

While the law does not require valuation to be done anytime before the sale, lawyers said it might be advisable to do so, before making a decision to sell.

It is also important for the owners to select a reputable marketing agent to ensure adequate steps are taken to market the property at the best possible price.

Another suggestion is to add a clause in the sales agreement to provide for a revision of the reserve price according to market conditions.

But property analysts countered that an overly flexible reserve price will not give developers the peace of mind to bid for the site.

Apart from pricing issues, the content of the sales agreement and the conduct of the sales committee should not be overlooked.

"The asset that is put in the hands of the sales committees (involves) hundreds of millions of dollars. More thought should be given into this process, in terms of due diligence required on the part of the sales committee, controls, and declarations of conflicts of interest, which need not reach the level of statutory duties of directors," said Philip Fong, Partner, Harry Elias Partnership.

The government is expected to amend the laws on en bloc sales soon.

Experts said that while it will make the process more transparent and allow residents to have more say, there could be other challenges.

"The effect is it’s going to cause the collective sales process to drag on a bit longer because you need to call for EOGM for example. That could pose some additional challenges to the agents because more documentations need to be done," said Nicholas Mak, a property analyst at Knight Frank.

Selling aside, owners must also be prepared to pay more for their replacement home, given the current property boom

 

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Aug 13, 2007
En bloc sale: Work starts even before all move out
AMID all the stories on collective property sales readers of The Straits Times have come across, mine in Balmoral View has a twist.
The developer has moved in equipment to build a showflat even though seven units of this 22-unit condo are still occupied.

It means we cannot use the visitors' carpark and the recreation areas, apart from having to tolerate the dirty swimming pool, noise and dust. In the meantime, we are still billed for monthly maintenance.

Yes, our condo was an early bird in the 'en bloc wave', and prices paid to unit owners were low compared to the current level. We accepted the deal, and the last unit must be vacated by November.

But what right has the developer to rush in before everyone moves out?

Some to-ing and fro-ing with Building and Construction Authority officials revealed that, although the deal was completed in May, the developer had already applied for and got the necessary approvals from the Urban Redevelopment Authority (URA) to build a showflat in February last year.

Did the URA check with the Strata Titles Board on the legality of such a move, given that there are residents who do not need to move out until November?

By mid-June, heavy construction equipment was moved in and the construction of the showflat is now in earnest. The recreation area has been cordoned off.

Also, I see obvious safety concerns with children playing in the compound, especially with wooden scaffolding less than a couple of metres from the swimming pool.

I understand the developer's haste to catch the hot property market but this is at the expense of residents still living on the estate.

Can the authorities enlighten us on this unsatisfactory situation?


Chio Tan Seng

Aug 17, 2007
En-bloc residents requested to stay on longer

WE REFER to the letter, 'En bloc sale: Work starts even before all move out' (ST, Aug 13), where Mr Chio Tan Seng queried why the developers of Balmoral View, which had been sold en bloc, were allowed to start building a showflat onsite even though seven units in the development are still occupied.
He asked if the developers are legally allowed to do this as residents have been allowed to stay till November. He was also concerned about the safety of the residents.

We understand that the developers took legal possession of the site in May. Some residents were allowed to stay longer at their request. This was privately agreed upon between the developers and the residents.

In July, the developers obtained Written Permission from URA to redevelop the site. Written Permission was given after URA had determined that the redevelopment plans complied with various planning requirements.

The developers need not obtain a further permit from either URA or BCA to build the showflat within the approved redevelopment site after they receive Written Permission. The developers and stakeholders of the project are directly responsible for safety at the worksite and they should take the necessary safety precautions to protect workers and the residents.

Han Yong Hoe
Director (Development Control)
Urban Redevelopment Authority

Ong Chan Leng
Director
(Special Functions Division)
Building and Construction Authority

 

[jq75]

Property en bloc deals expected to slow in H2: consultants

18 August 2007 0011 hrs

SINGAPORE : The value of en bloc deals done in the second half of this year could slow down compared to the first six months, as sentiments in the property market turn cautious.

But property consultants say total deals are still likely to hit $16 billion - double that of last year - due to an exceptionally active first half.

A combination of factors - including uncertainties in the financial markets prompted by the US sub-prime crisis and the government's move to raise development charge rates - could have dampened developers' appetite for more land.

Karamjit Singh, MD of Credo Real Estate says: "Over the last one month or so, things have turned somewhat cautious. There were a lot of discussions about whether the government could cool the market and how they would implement measures.

"Developers have also bought quite a bit of sites in the first half of this year. Some of them are telling us that they have bought more than they ever intended for the entire year, so they will need to slow purchases until some of their new projects get off-loaded."

Other developments include an impending change in en bloc laws that could make it tougher to conclude a deal, and a growing legal spat between buyers and sellers of Horizon Towers.

Property consultants say owners may now need to temper their expectations in terms of asking prices.

"I would think that most of the en bloc sales will not reach the prices that the owners want to sell at. Horizon Towers was in a situation where, when the deal was signed, the market spiked up a lot. But in today's situation, are we going to expect another hike in the market at that kind of rate? That's questionable," says Dennis Yeo, MD of Colliers International.

But for homeowners who are worried that they may have missed the boat for en bloc sales, analysts say there could still be a silver lining.

"What may also happen on the flipside is that some en bloc sellers' expectations may turn more realistic. Prices may drop a bit, thereby motivating some developers waiting by the wings to take the bite," says Credo Real Estate's MD.

There were over $11 billion worth of en bloc deals in the first six months of this year, with many projects setting new record prices. - CNA

 

[jq75]

Aug 20, 2007
'Phantom' buyer ploy to get apartment owner to support en-bloc sale
I COMPLETELY agree with Ms Alison Taylor, 'Love your home? Beware the condo raiders' (ST, Aug 16).
My friend who lives in a condo in Bedok has a similar experience.

He was approached to vote for an en-bloc sale at his condo with an offer of a fantastic sale price in order to achieve the 80 per cent target.

They even told him that there is a ready buyer. But when he asked who the prospective buyer was, there was no answer. This is clearly a ploy to make gullible owners to sign up.

I would like to suggest that the percentage be raised to 90 per cent approval by subsidiary proprietors before an en-bloc sale can be launched to protect the interest of minority owners.

William Tay Kay Chiak

 

[jq75]

Aug 21, 2007
Collective sale fever expected to push up key development fee
Charges imposed on developers could rise in Govt's half-yearly review next month
By Fiona Chan
THE recent record-breaking run of collective sales is likely to push up a key government charge imposed on developers, making land sites - and collective deals - more expensive.
This development charge, which is due for a half-yearly revision on Sept 1, could rise by up to 25 per cent islandwide for residential non-landed sites on average, say property consultants.

This is almost double the 14 per cent rise in the previous revision in March, which was already considered a large increase. Even so, most consultants believe higher charges may not dampen the collective sale market as long as developers remain bullish.

Development charges reflect recent land and property values and affect future acquisition decisions by developers. They can reach millions of dollars, and vary according to land use for the 118 locations in Singapore.

The upcoming revision is likely to be watched closely by developers, as it comes on top of a surprise 40 per cent hike in development charges last month.

Given the frenzied pace of collective sales and the soaring prices of offices, most consultants expect the charges to jump the most for residential and commercial sites.

According to property firm Jones Lang LaSalle (JLL), collective sales added up to $10.2 billion in the first seven months of this year alone, boosted by benchmark deals such as The Ardmore in Ardmore Park and Fairways Condominium in Telok Blangah.

JLL expects development charges for non-landed sites to rise by up to 60 per cent in certain areas, led by District 9, East Coast and Telok Blangah.

But another firm, Colliers International, believes city-fringe sites will see higher increases.

While charges for non-landed sites jumped the most in prime areas during the last revision, Colliers expects that this time round, they will rise more in areas 'located at the immediate fringe of Orchard, downtown and Sentosa Cove'. These include the Novena, Newton, Holland Road, Farrer Road and Telok Blangah areas.

But large increases are also likely in areas as far afield as St Patrick's Road near Katong and the area around Upper Paya Lebar and Geylang, due to recent transactions in those areas, added Colliers' director of research and consultancy, Ms Tay Huey Ying.

As for landed sites, JLL is predicting a 20 to 30 per cent rise in development charges islandwide, with those for District 11 sites jumping by up to 50 per cent.

Office sites are also expected to see higher charges.

Colliers' forecast is a 40 to 50 per cent jump for Collyer Quay and Marina Bay, and 25 to 40 per cent for the Central Business District. JLL expects increases of 20 to 25 per cent islandwide.

Despite the fact that the hikes in development charges are likely to be higher and more widespread this time, consultants believe they may not slow the collective sale market or halt rising land prices.

Ms Tay noted that in the last revision, the charges had been raised by up to 64 per cent for some locations, but that did not deter the collective sale fever from going strong.

'For well-located sites, developers' bullishness in the end-user market gives them the confidence to bid for land at benchmark prices,' she said. 'They are confident of passing on the increased costs to end-purchasers through benchmark launch prices.'

But she added that for sites in less desirable locations, a steep hike in development charges could 'serve as a wake-up call to home owners who have been holding out for a higher premium'.

Agreeing, JLL's regional director and head of investments, Mr Lui Seng Fatt, said that development charges for freehold land are small as a proportion of the total land price and development cost.

'However, it will have a more significant impact for leasehold land because more charges are usually payable,' he said.

fiochan@sph.com.sg

 

[jq75]

Aug 24, 2007
Horizon Towers sellers sued for botched collective sale
$500m deal scuppered by simple technical error of missing signatures on the sale application
By Joyce Teo
A LEGAL battle looms for the sellers of Horizon Towers units, after it was disclosed yesterday that a simple technical error on sale documents had derailed the estate's collective sale.
The intended buyers - Hotel Properties (HPL) and its two partners - are taking the 173 majority owners to the High Court over their failure to go through with the $500 million sale.

Their move comes after the Strata Titles Board (STB) released the grounds for its Aug 3 oral decision to halt the sale application of the Leonie Hill property. The sellers had requested the clarification.

The STB said documents carrying the signatures of three majority owners - who are sellers - were not included in the sale application.

The original committee members representing the sellers had made a statutory declaration that the signed documents were included, without realising that they were not.

And the STB - which only convenes to hear a case once documents are declared to be correct and in order - could not allow any changes to be made to the application.

The STB said there were concerns over whether it had the power to allow an amendment.

But under the law, once a sale application is found to be defective, the board's role ceases.

The STB's clarification, coincidentally, was followed by a statement from HPL, which said that proceedings have been started in the High Court against the sellers.

HPL and its partners Morgan Stanley Real Estate-managed funds and Qatar Investment Authority said the sellers are in breach of the sales contract and are ordering them to 'do everything in their power' to obtain a collective sale order from the STB.

That will result in the sellers having to refile the sale documents, which also means that they must sell their 99-year leasehold estate at the $500 million price inked in February.

This rankles with many owners - those who backed the sale and some who did not - as property prices have rocketed since then. The Grangeford estate nearby has sold for more than double the Horizon Towers price, on a per sq ft basis.

If they do not go ahead with the sale, HPL and partners said they will sue for damages for breach of contract.

But even if a sale order is obtained, the HPL consortium said they can still sue for other damages.

Any damages will be assessed by the court but the buyers - represented by Allen & Gledhill - have earlier put lost profits at $800 million to $1 billion.

The 173 majority owners of Horizon Towers, including the sales committee, will be liable.

The majority owners were originally represented by Drew & Napier, and subsequently replaced by Tan Rajah & Cheah.

Yesterday's developments - just the latest in a saga stretching back to the contentious sale in February - puts the ball back into the sellers' court.

Because the STB's oral decision was made solely because the documents were defective, and not on the merits of the case, it said the sellers can refile a fresh set of documents.

The case has been made even more complicated by the fact that the sellers had an Aug 11 sale deadline written into their contract with the buyers.

When the STB killed off the sale on Aug 3, it left the owners just eight days to devise a strategy.

HPL and partners asked the sellers to extend the deadline by four months from Aug 11 and file a new sale application or appeal to the High Court to reconsider STB's decision.

The sellers rejected this option.