http://www.straitstimes.com/Money/St...ry_655627.html

Apr 12, 2011

12 en bloc sale deals sealed, more in pipeline

Observers expect this year's sales to beat last year's in volume, value

By Cheryl Lim


EN BLOC activity has gained momentum in the first few months of this year with 12 successful deals totalling $37.1 million, according to analysts' estimates.

And plenty more are in the pipeline. Credo Real Estate's deputy managing director Tan Hong Boon said around 24 collective sale tenders have entered the market this year. Yesterday, another project - Pearl Bank Apartments - went on sale at an expected price of $750 million. This translates to $1,495 per sq ft per plot ratio. The tender will close on May 25.

Observers do not expect any slowdown in activity in this segment. Some say between 10 and 20 more sale sites could hit the market this month and next.

Others expect the total number of collective sales this year to beat last year's figure in terms of volume and total value. Last year, 34 sales worth $1.7 billion were sealed, said Credo Real Estate.

Some insiders argue that while January's property market cooling measures have dampened sentiment, developers are set to maintain a healthy appetite for such deals. Smaller sites are expected to do well this year, said HSR's head of investment sales Jeffrey Goh: 'Developers could be finding it too risky to commit to larger sites, especially with all the uncertainty in the market.'

This year has seen no shortage of mega en bloc sites. But projects such as Tulip Garden are yet to secure concrete deals.

Buyers of en bloc sites range from foreign developers like China Sonangol Land to smaller boutique developers like Heeton Holdings, with even big players like Far East Organization and CapitaLand gunning for a slice of the action as well.

But chasing sites under the Government Land Sales programme comes with more certainty, said Mr Goh, and a shorter, more straightforward process.

Knight Frank's executive director of investment sales Nicholas Wong said many attractive sites in mature, well-established estates are taken by older projects: 'The only way developers can access these sites is through a collective sale.'

Mr Tan said sites from a wide range of districts might go on sale this year.

Analysts agree that this year could see the rise of more high-end collective sales.

Credo's Mr Tan said prices of en bloc sites in suburban and mid-tier markets have risen: 'High-end sites on the other hand, haven't made as much progress so we could see developers paying more attention to them as the price gap between high-end and mid-tier sites narrows.'

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