Some large estates tried and failed

[mr funny]

http://www.straitstimes.com/Money/St...ry_604932.html

Nov 19, 2010

Some large estates tried and failed


A COLLECTIVE sale of the 660-unit Pine Grove has moved one step closer to reality and would, if successful, become the largest collective sale in Singapore.

But it is unclear whether other large estates are likely to follow suit.

'Only half the battle has been won with the collection of 80 per cent of the residents' signatures,' said an industry analyst who declined to be named, referring to news earlier this week that Pine Grove had secured the requisite level of approval.

'The second half of the battle is to find a buyer. For it to be looked upon as a shining example, it must sell successfully. So it's still too early to say that this is going to change the attitude of owners at other estates.'

Several other large estates have attempted collective sales but have so far failed to garner the required level of support from residents.

These include Dairy Farm Estate, Clementi Park and Pandan Valley, which at 623 units, is the closest in both size and location to Pine Grove.

Earlier this year, a collective sale committee for the 489-unit Clementi Park was disbanded, with marketing agent Knight Frank admitting it did not think it was possible to get 80 per cent backing for the sale even if the reserve price was set higher.

When Dairy Farm Estate, which has 478 units, tried to go en bloc in 2007, two separate groups of residents started a petition against it.

Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said residents often find it hard to accept a collective sale, given the emotional attachment they might have to their homes.

However, if their estates keep trying to mount a sale, as Pine Grove did, it would gradually become easier for them to come around to the idea.

Of course, it also helps if residents are offered higher prices for their homes. But this would also have its potential drawbacks, Mr Tan noted.

'If it's too high, it lowers the chance that developers will want to bid for it.'

YASMINE YAHYA

[Wild Falcon]

Dairy Farm and Clementi Park are freehold homes with lovely environment and owners can stay a long time without having to worry the depreciation of the lease. Pine Grove and the likes of Laguna, Farrer Court etc are 99LH condos with lease running down. Imagine when the lease runs to 50 years, which theoreticallymeans 50% of the land value is gone (i.e. developer has to top up 50 years which means it eats into your proceeds). These 99LH homes with 40 years already expired clearly don't have the benefit of time and need to enbloc ASAP. Every year means an additional year of lease depreciation.

[kingkong1984]

Dun worry, more than 50 yrs may be a safety concern, it will get lease top up unless govt has other plans. Lh by then would have in theory appreciate 5% a year and be 50% more in price, net net same and owner enjoyed free stay but may have missed out on fh appreciation. Get fh mm is good for u.

[Wild Falcon]

You're not getting the pt. They can't wait because the developer will only pay the balance of the lease term. It will not appreciate 5 pct per year. Imagine it has one yr lease term left. Which idiot will pay 2 million for one year lease? The value will start falling at some pt.

[sfwoo]

The value will start falling at some pt.

LH, the value starts to fall when the banks dun lend you money to buy it anymore. Usually, when 60 yrs of lease left. Buyers will have to fork out cash to buy old old LH...I have heard of $400 000 LANDED LH properties...30 plus years left...

[bargain hunter]

i feel LH landed is much riskier than LH condo as the latter can be en-bloc. landed stand alone is but a sitting duck as the lease winds down, that's why more difficult to get loan and "affordable" housing for these cheap landed.

LH, the value starts to fall when the banks dun lend you money to buy it anymore. Usually, when 60 yrs of lease left. Buyers will have to fork out cash to buy old old LH...I have heard of $400 000 LANDED LH properties...30 plus years left...

[sh]

Dun worry, more than 50 yrs may be a safety concern, it will get lease top up unless govt has other plans. Lh by then would have in theory appreciate 5% a year and be 50% more in price, net net same and owner enjoyed free stay but may have missed out on fh appreciation. Get fh mm is good for u.

Refer to SLA's circular below

http://www.sla.gov.sg/faq/differential_premium.pdf

Refer to the table at the last page. That's the extent the value of the LH land depreciates every year. You will see that the depreciation accelerates as it nears the end of the 99 year.

That's will give u an idea of how much a 99LH property depreciates relative to FH. It's dependent on the age of the 99LH property.

That's how SLA determines the amount differential premium to be topped up for extending the lease back to 99 years.

[devilplate]

can still buy 99lh to fry fry la....ppty once over 40yo, very very old liao....enbloc better! smtimes i scared to take the old old lifts...lol

[sh]

can still buy 99lh to fry fry la....ppty once over 40yo, very very old liao....enbloc better! smtimes i scared to take the old old lifts...lol

The older the 99LH, the lower the enbloc value too. Need to top up more differential premium for the land....

[devilplate]

The older the 99LH, the lower the enbloc value too. Need to top up more differential premium for the land....

can get good old gems for 99lh ....but only if u grab it during bad times...hehe...i missed international plaza and pearlbank

[sh]

can get good old gems for 99lh ....but only if u grab it during bad times...hehe...i missed international plaza and pearlbank

Both 30+ 40 years old. Not easy the sell later.... but that will account for lower price.

[Fleur]

But these are big commerical developments, with big corporations holding stake in them? What is the likelihood of en bloc?

[sh]

But these are big commerical developments, with big corporations holding stake in them? What is the likelihood of en bloc?

The question is whether the project is fully built. ie the plot ratio for the land is already fully used. There is less incentive for enbloc if there is no excess plot ratio.

I'm not sure about this. The 80% approval required for enbloc for residential development. Not sure about mixed used development? Is 100% approval required?

Big corporations will accept windfall too...

[dlinq]

i wonder if anybody here know the apportionment method of Pinegrove, Pearlbank or Greenlodge?

Cheers...