Annex A
The Ministry of Law has announced that the Land Titles (Strata) (Amendment) Act, enacted by Parliament on 20 September 2007, will take effect from 4 October 2007. It will affect en bloc sale projects in the following ways:
- En bloc sale projects where the required 80% or 90% majority consent of owners (based on share value) has not been obtained as at 4 October 2007 will have to comply with the new rules.
- En bloc sale projects where the required 80% or 90% majority of owners (based on share value) have signed the Collective Sale Agreement (CSA) will not be affected by the new ruling.
The new amendments are summarised as follows:
(I) Additional Consent Requirement – by building’s GFA
In the past, an application for an en bloc sale can be made if there is consent from the owners holding at least 80% of share value if the development is more than 10 years old, and 90% if the development is less than 10 years old.
- The new rule of majority consent requires approval from owners representing at least 80% of the building's gross floor area (GFA) if the development is more than 10 years old, or 90% if it is younger than 10 years old.
(II) Formation and Proceedings of an En Bloc Sale Committee
Previously, the law did not contain rules to govern the formation and the proceedings of an en bloc sale committee.
The new rules regulate the formation of the sale committee and the sale committee's proceedings. These rules have been adapted from the provisions in the Building Maintenance and Strata Management Act (BMSMA) 2004 in respect of the council of the management corporation. Other details include the following:
(a) Formation of Sale Committee
- (2) A decision to form an en bloc sale committee will have to be made by ordinary resolution passed at a general meeting. There can only be one sale committee per development at any time.
- (3) Members of the sale committee will have to be elected at the meeting. Similarly, a sale committee may be dissolved by ordinary resolution at a general meeting.
- (4) A person standing for election to the sale committee must meet certain eligibility criteria. For example, such a person has to be an owner of a unit in the development; or be nominated by an owner which is a company; or be a member of the immediate family of the owner who is nominating him.
- (5) A person standing for election to the sale committee must declare his interest or relationship, if any, with a property developer, property consultant, marketing agent or legal firm.
(b) Proceedings of Sale Committee
(6) The sale committee shall convene general meetings to consider key issues including the following:
- the appointment of any lawyer;
- the appointment of property consultant;
- the appointment of marketing agent;
- the apportionment of sale proceeds;
- the terms and conditions of the Collective Sale Agreement (CSA); and,
- the terms and conditions of the Sale and Purchase (S&P) agreement.
These changes will ensure that owners will have the opportunity to discuss such key issues before consenting to them.
- (7) The sale committee shall keep minutes of its proceedings and must, within 7 days after each meeting, either display the minutes on the management corporation's notice board or pass the minutes to all owners.
(III) Collective Sale Agreement
Previously, the law did not regulate drafting and signing of the CSA. There are three changes made to the rules, including:
- (8) The en bloc sale committee must provide a preface to the CSA listing the clause numbers and page numbers where important information such as reserve price, apportionment method, etc. may be found.
- (9) When an owner signs the CSA in Singapore, the lawyer appointed for the en bloc sale will have to be present to explain the legal terms and liabilities and address any doubts that the owner may have.
- (10) An owner can rescind his agreement to be a party to the CSA within a 5-day cooling-off period after signing the CSA for the first time.
- (11) The Sale Committee must provide updates of the consent level every 4 weeks. The updates on the consent level must also be certified by a lawyer.
- As it is, the CSA will lapse after one year from the first signature. When no buyer is forthcoming after that one year, the Sale Committee ceases to exist.
(IV) Mode of Sale: By Public Tender or Public Auction
Previously, the mode of sale was not regulated. Now the new rules require the mode of sale to be as follows:
- (12) Every launch of an en bloc sale must be by public tender or auction.
- (13) Following a tender or auction, especially one which fails to achieve the price acceptable to the sale committee, the sale committee can engage in follow-up negotiations for sale by private treaty with any bidder to get the best deal for the owners. But any sale by private treaty must be concluded within 10 weeks from the close of the tender or auction.
- (14) The sale committee must obtain from an independent valuer a valuation report on the value of the en bloc sale site as at the date of the close of the tender or auction on the same date.
- (15) The sale committee will be required to provide the owners with information on the bids received as soon as practicable after the close of the tender or auction or, where applicable, after the sale committee has entered into a sale by private treaty.
(V) Return of Moneys in Management Fund and Sinking Fund
Previously, the buyer-developer was entitled to the moneys remaining in the management fund and sinking fund upon the termination of the strata scheme following an en bloc sale.
(16) The new rules provide that upon the legal completion of an en bloc sale, the moneys in the management fund and sinking fund of a management corporation shall be returned to the en bloc sellers according to their shares value allotments.
En bloc projects still in the market
Annex B
(1) Hertford Mansion
District 8 Hertford Mansion at Hertford Road/Bristol Road near Farrer Park has been put on the en bloc sale market with an indicative price of $12 million or $744 per sq foot per plot ratio (psf ppr). The 11,527 sq ft plot is not too far away from Kandang Kerbau (KK) Women’s and Children’s hospital
The break-even cost for Hertford Mansion is about $1,100 to $1,200 psf.
It could be rebuilt into a small 5-strorey apartment block with 20 units of 900 sq ft each. There is no development charge payable for this site. (4 Oct)
(2) Holland Hill Lodge
District 10 Holland Hill Lodge is asking for $16 million or $1,108 psf ppr. Situated behind Hollandia, the site area is very small at 9,033 sq ft.
There is 100% consent from all the owners and there is no need for Strata Titles Board’s approval. As such, when a buyer is found the legal completion can be done within three months.
The break-even price for Holland Hill Lodge is approximately $1,500-$1,600 psf. There is no development charge payable for this site. (4 Oct)
(3) Spanish Village
District 10 Spanish Village on Farrer Road has been put on the collective sale market for $878 million or about $1,700 psf ppr.
It has a land area of 331,457 sq ft and a plot ratio of 1.6 which allows a storey height of up to 12. There is an estimated $23 million in development charge (DC) payable. (9 Oct)
(4) Royalville
District 9 Royalville, off Sixth Avenue has been put on the collective sale market for $330 million to $350 million or about $1,235 to $1,305 psf ppr
The 19-year old freehold project has a site area of 174,176 sq ft and a plot ratio of 1.4 which gives a maximum height of 5 storeys. (9 Oct)
(5) Welkin Mansions
District 9 Welkin Mansions at 17 River Valley Close is up for en bloc sale for for $130 million or $1,800 psf ppr.
The project is diagonally opposite Pacific Mansion which is also on the en bloc sale market. The site can be built up to 36-storey apartment block with about 48 units of around 1,500 sq ft. (11 Oct)
(6) Westwood Apartments
District 10 Westwood Apartments at 15 Orchard Boulevard has been put on the en bloc sale market for $488 million or $2,800 psf ppr.
The freehold 62,179 sq ft site is the first luxury collective sale site to be launched under the new en bloc sale rules and during the current market lull.
Currently, the project has 48 units but it can be redeveloped in a 20-storey condominium project with 69 units of around 2,500 sq ft each.
The site is near to Orchard Road and the surrounding luxury residences such as the St Regis Residences, Parkview Eclat, and Orchard Residences. (11 Oct)
(7) Northshore Bungalows
In Punggol, Northshore Bungalows is on the en bloc market for $92.4 million, excluding development charges of $14 million.
Currently, the development comprises 20 units of bungalows and two plots of bungalow land with swimming pool and a clubhouse. The 129,585 sq ft site has a plot ratio of 2.1 and is zoned for 2-storey bungalows. (11 Oct)
(8) The Estoril
District 10 The Estoril on Holland Road has been put up for collective sale for $208 million or $1,536 psf ppr.
The 44-unit project has a land size of 84,600 sq ft and will be able to accommodate 75 new units of around the size of 1,800 sq ft. The estimated breakeven is around $2,000 to $2,050 psf.
In July, nearby 162-unit Tulip Garden was sold for $516 million or about $1,018 psf ppr. (16 Oct)
(9) Elizabeth Towers
District 9 Elizabeth Towers at No 12 Mount Elizabeth is being put up on the en bloc sale market. The owners are asking for $673 million or $2,666 psf ppr. No development charge is payable.
The en bloc sale site has an area of 54,318 sq ft site. URA has already given the planning approval for the site to be built up to a plot ratio of 4.647.
Currently, the freehold project has 80 apartment units comprising 3-bedroom units, maisonette and penthouses. (18 Oct)
(10) Villa delle Rose
District 10 Villa delle Rose at No 2 Taman Nakhoda in Holland Road area is being put on the en bloc sale market with a price tag of $700 million or $1,758 psf ppr. There is an estimated $31 million in development charge payable.
The freehold site has a land area of 297,132 sq ft and a plot ratio of 1.4 which allows a maximum height of 5-storey.
Villa delle Rose, developed by Pontiac Land and Keck Seng, comprises 104 units ranging from 2,800 sq ft to 3,200 sq ft. (18 Oct)
(11)Novena Hill
Novena Hill at No 33 Jalan Novena is put up on the en bloc sale market for $56 million to $60 million, or up to $1,777 per sq ft of potential gross floor area.
The freehold site opposite the Ministry of Home Affairs is within District 11 and surrounded by smallish apartment developments. (20 Oct)
(12) Cavenagh Gardens
District 9 Cavenagh Gardens on Cavenagh Road, near the Istana has been put up on the en bloc sale market for $619 million or $2,308 per sq ft of potential gross floor area.
The freehold site has an area of 130,000 sq ft and if approval is granted by the State, the new owner will be able to acquire an adjacent State land to form a bigger parcel.
However, if no approval is granted, the new buyer may resort to refurbishment or doing an addition and alteration (A&A) instead of redeveloping the entire project so as to keep the current 13-storey form. (20 Oct)
(13) Willyn Ville at Holland Village
District 10 Willyn Ville at No 1 Holland Avenue is put on the en bloc sale market for $120 million or $2,153 psf ppr.
The freehold site has a land area of 39,802 sq ft and a plot ratio of 1.4 which gives a maximum storey height of five. No development charge is payable for this project. (23 Oct)
(14) Rich East Garden
District 16 Rich East Garden at No 300 Upper East Coast Road is up for collective sale for $90 to $95 million or $619 to $653 psf ppr (including development charge).
The freehold site has a land area of 105,000 sq ft site and a plot ratio of 1.4 which gives a maximum storey height of five.
Behind Bayshore Park, the site may be redeveloped into about 100 apartments with an average size of 1,400 sq ft each. Currently, there are only 40 units in the project. (23 Oct)
(15) Amber Glades
District 15 Amber Glades, off Amber Road, has been put up for collective sale for $145 million or $1,345 psf ppr, excluding a development charge of about $9 million.
The redevelopment site has a land area of 40,917 sq ft and a plot ratio of 2.8 which gives a maximum storey height of 36.
The site can be redeveloped into 88 new apartments of 1,300 sq ft each. The breakeven price is about $1,700 to $1,800 psf. The launch price could be over $2,000 psf.
In August, a smaller site off Meyer Road was sold for $58 million or an estimated unit land price of $882 psf per plot ratio including a development charge. (24 Oct)
(16) Thomson View Condo
District 20 Thomson View Condo, along Upper Thomson Road, has been put up for en bloc sale for $550 million or $652 psf per plot ratio. The asking price is inclusive of development charge estimated at $110 million and a differential premium of about $80 million for topping up of remaining lease period to full term of 99 years.
New owner of the 540,314 sq ft site may be able to acquire an adjacent state land of about 39,000 sq ft along Bright Hill Drive subject to approval by the authorities.
The site is zoned residential with a plot ratio of 2.1 which gives a maximum storey height of 24. (31 Oct)
(17) Chancery Court
District 11 Chancery Court a privatised HUDC estate along Dunearn Road has been put up for collective sale for $468 million or about $1,614 psf per plot ratio.
The asking price is inclusive of a development charge of $65.5 million and a differential premium of $52 million for topping up of the site's lease to full-term 99 years. The former HUDC estate was completed in 1993.
The 136-unit project has a site area of 259,137 sq ft land and can be redeveloped into a new condo with about 242 units with an average size of 1,500 sq ft. The site has a plot ratio of 1.4 which gives a maximum storey height of five. (31 Oct)
“Why rents for private homes will continue to go up?” Annex C
Quarter-to-quarter, rents for private homes were up by 11.4% over the 10.4% increase in the second quarter of the year. Altogether, in the past three quarters, rents for private homes have gone up by 32.2%. In 2006, rents went up by 14.1% for the whole year.
- More than 2,000 apartments sold in en bloc sales
The severe constraint in demand and supply of private homes has been the main culprit for pushing up private home rentals. Altogether, more than 100 residential projects have been sold en bloc and soon construction works will take over and more than 2,000 apartment units would be taken out of the supply line within this one to one-and-a-half year.
- Few units will be completed in 2008
On the other hand, few units will be completed in 2008 and as such there is no respite for the shortage. According to URA’s data, only 5,541 homes will be completed in 2008. Taken into consideration the 2,000-odd units that will be withdrawn from the market, the net supply will be even lesser.
Why HDB resale prices will continue to rise?
Annex D
Unemployment rate dropped to the lowest in a decade and a robust service industry awaiting one of the most lucrative trades to come to fruition in two years time, Singapore really have reasons to believe that all things will become dearer, especially real estate. Below outlines a couple of strong reasons why HDB resale prices will soar.
Jobless rate at the lowest in ten years (31 Oct 2007)
According to the Manpower Ministry (MOM), Singapore's jobless rate fell to 1.7% for the first time in ten years.
57,600 more new jobs were created in the third quarter of 2007, compared to the increase of 43,000 in the same quarter last year.
In all, the total employment for the first three quarters of 2007 was 171,500, which is close to the 176,000 posted for the whole of 2006.
The services sector continued to contribute to the employment gains, creating 34,500 more jobs in the third quarter. Manufacturing added 11,800 jobs. The red-hot construction sector created 10,800 jobs.
The Integrated Resorts (IRs) will groom more affluent people (11 Oct 2007)
The prospect of the two integrated resorts which will incorporate a casino each and the robust financial services industry will continue to fuel the economic expansion in Singapore.
With a possible economic contraction in the US and Europe, Singapore is likely to benefit from greater inflows of wealth from risk averse foreign investors looking safer havens.
Figures from Standard Chartered's wealth management business put the annual increase in inflow of foreign based private funds into Singapore at over 16% annually.
The number of Singaporeans holding at least US$1 million (S$1.48 million) in liquid assets can hit 29,000 by 2011.
That will be an increase of 7,000 or about 7% a year while their combined assets is expected to snowball from the current US$64 billion to US$85 billion (S$125.4 billion) in four years.
Singapore will have the highest number of people with more than US$600,000 in liquid assets to their name. The number of affluent people residing in Singapore will grow from 410,000 in 2006 to more than 600,000 by 2011, with the value of their assets increasing from almost US$140 billion to US$210 billion. (11 Oct)
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