Will owner of high floor get a premium when en bloc

[fafalulu]

Will owner of high floor unit get a premium when en bloc?

Or just based on floor area?

[chiaberry]

Will owner of high floor unit get a premium when en bloc?

Or just based on floor area?

It is up to the committee organizing the en bloc as to what formula to use. Mostly they would use a combination of floor area and share value of the unit. Thus good facing/high floor does not command a premium.

If you have objection to this formula you have to attend the meetings of the en bloc committee for your condo and bring up this matter.

[devilplate]

Will owner of high floor unit get a premium when en bloc?

Or just based on floor area?

Usually a combination of market valuation and share value

[fafalulu]

Usually a combination of market valuation and share value

Thanks. If market value is in the formula then there is actually a premium.

Share value means what?

[fafalulu]

It is up to the committee organizing the en bloc as to what formula to use. Mostly they would use a combination of floor area and share value of the unit. Thus good facing/high floor does not command a premium.

If you have objection to this formula you have to attend the meetings of the en bloc committee for your condo and bring up this matter.

That means a lot of debate and argument between owners?

[SpinCity]

Rarely see market value coming into the calculation of value proportion. Normally share value and floor area, but at the end of the day, the formula for proportion is recommended by the SC and approved by the owners
Share value is basically each unit's share in the common area, which is also used to calculate the management fees

[gn108]

Normally combi of SV and GFA.
Usually 50% SV and 50% GFA.

En bloc means selling the land - so whether high or pool view doesn't matter.

[Laguna]

A combination of
Share value
Floor area
valuation

the % is up to the EAGM to approve with the recommendation from the SC

[EBD]

Thanks. If market value is in the formula then there is actually a premium.

Share value means what?

You are most likely wrong.

Market value is normally to do with the size of the apt & avg psf. Not floor.
That is why the enblockers go for bad facing low floor. Cheap but get same premium as top floor.

Why am I so sure? Used to live on top floor. Even with "market value" component I got the same as people on the 2nd floor.

Not necessarily the case in your situation....... but I'd be amazed if the people working the deal are not looking at it this way.
Self interest governs all.

[Geylang OKT]

It is up to the committee organizing the en bloc as to what formula to use. Mostly they would use a combination of floor area and share value of the unit. Thus good facing/high floor does not command a premium.

If you have objection to this formula you have to attend the meetings of the en bloc committee for your condo and bring up this matter.

You are right. If I am a serial enbloc-er I will chose the lousiest facing and low floor. I will still get the same compensation as those with good views and high floors, all others being equal (i.e. floor area)

[proper-t]

You are right. If I am a serial enbloc-er I will chose the lousiest facing and low floor. I will still get the same compensation as those with good views and high floors, all others being equal (i.e. floor area)

Which is why sea-facing devpts always have great difficulty to go en-bloc. Examples like laguna, bayshore etc. The owners with great views willl always demand much more.....end up cannot meet 80% or reserve price becomes unrealistic

[SpinCity]

Agree but normally for those old developments which have "real" enbloc potential to be realized in the short term, there will be no or little difference in terms of pricing for high and low floors.

[devilplate]

Den the sail will nvr get enbloc

[proper-t]

Den the sail will nvr get enbloc

Lots of problems - 1. plot ratio already maximized. Other problem is the large no. of units or owners. The last is that its 99yrs and sited in super prime locale. Even if all owners agree. Potential buyers will have to contend with the possibility that govt may not extend lease OR charge super high price for extension.

[Geylang OKT]

Lots of problems - 1. plot ratio already maximized. Other problem is the large no. of units or owners. The last is that its 99yrs and sited in super prime locale. Even if all owners agree. Potential buyers will have to contend with the possibility that govt may not extend lease OR charge super high price for extension.

Older devts and walkup apts plot ratio usually not yet maximised i.e. those built in the 1970s and early 1980s. Also got chance the govt raise the plot ratio

[fafalulu]

wonder why geylang area plot ratio 2.8 but maximum 8 levels built.

Is there other height control over that area?

[Wild Falcon]

Based on share value. I know of some 1200sqft 3 bedder (4 shares) has the same share value as a 1400sqft 3 bedder. So if you buying purely for enbloc, it doesn't matter high floor good view. It's based on share value.

Just think about it. Why would it matter for a buyer (new developer) who is going to tear down the entire thing anyway? In short, no one is going to pay you a premium for your "view" or expensive reno becos it is meaningless to the buyer who will tear down everything. Wat he wants is just the LAND.

[Wild Falcon]

Why not? If they can enbloc at a higher price than what each of them can sell individually, they will still go ahead. And the 99LH is going to run down, they better enbloc before 50 years old when value is halved. They will be desperate to enbloc at some point - high or low floor. It's not about your neighour benefiting from the low floor, its about preserving your own wealth.

Den the sail will nvr get enbloc

[devilplate]

Why not? If they can enbloc at a higher price than what each of them can sell individually, they will still go ahead. And the 99LH is going to run down, they better enbloc before 50 years old when value is halved. They will be desperate to enbloc at some point - high or low floor. It's not about your neighour benefiting from the low floor, its about preserving your own wealth.

Bcoz psf disparity is too huge between bayview n no n bayview units

Unless they based on share value plus market valuation to determine the payouts

[SpinCity]

Based on share value. I know of some 1200sqft 3 bedder (4 shares) has the same share value as a 1400sqft 3 bedder. So if you buying purely for enbloc, it doesn't matter high floor good view. It's based on share value.

Just think about it. Why would it matter for a buyer (new developer) who is going to tear down the entire thing anyway? In short, no one is going to pay you a premium for your "view" or expensive reno becos it is meaningless to the buyer who will tear down everything. Wat he wants is just the LAND.

enbloc buyers wouldn't care as they pay one price for the whole development, not individual units
The proportion formula is what used to split the proceeds from the enbloc sale among all the proprietary owners, which is the where the problem is from

Normally the proportion formula will have only two factors: floor area and share value
the mixed will be recommended by the sales committee and approved by the proprietary owners
If high floor owners want more, they will not agree with the the formula. if there are enough of them, enbloc deal will fail, unless other owners are willing concede

[Laguna]

The Singapore Institute of Surveyors recommends the following methods:-

1. Share value Method: the apportionment for each unit is proportionate to its unit’s share value in relation to the total share value for the development.
2. An average of the strata floor area and the share value method – the apportionment is according to the unit’s strata floor area in relation to the total strata floor area. The figures derived from the share value Method and floor area method are then averaged by taking 50% of each method.
3. General valuation – a value is estimated for each typical unit. This valuation is on an individual market basis, ignoring collective sale potential, floor level, facing etc.. The valuation of each typical type of unit would vary according to the floor area of each unit on the basis that the larger the unit, the lower the value per square foot. The apportionment for each unit would then be in proportion to that unit’s value in relation to the total value for the whole development.
4. The combination of general valuation and share value Method – a value is estimated for a typical unit of each type as in (c), and the total value is computed. This total value is then deducted from the sale price, and the balance is distributed to each unit according to each unit’s share value as a proportion of the total share value for the development.

[devilplate]

The Singapore Institute of Surveyors recommends the following methods:-

1. Share value Method: the apportionment for each unit is proportionate to its unit’s share value in relation to the total share value for the development.
2. An average of the strata floor area and the share value method – the apportionment is according to the unit’s strata floor area in relation to the total strata floor area. The figures derived from the share value Method and floor area method are then averaged by taking 50% of each method.
3. General valuation – a value is estimated for each typical unit. This valuation is on an individual market basis, ignoring collective sale potential, floor level, facing etc.. The valuation of each typical type of unit would vary according to the floor area of each unit on the basis that the larger the unit, the lower the value per square foot. The apportionment for each unit would then be in proportion to that unit’s value in relation to the total value for the whole development.
4. The combination of general valuation and share value Method – a value is estimated for a typical unit of each type as in (c), and the total value is computed. This total value is then deducted from the sale price, and the balance is distributed to each unit according to each unit’s share value as a proportion of the total share value for the development.

The last one is the one i tot most ppl r using now.....tats y i say market valuations plus share value....

[fafalulu]

enbloc buyers wouldn't care as they pay one price for the whole development, not individual units
The proportion formula is what used to split the proceeds from the enbloc sale among all the proprietary owners, which is the where the problem is from

Normally the proportion formula will have only two factors: floor area and share value
the mixed will be recommended by the sales committee and approved by the proprietary owners
If high floor owners want more, they will not agree with the the formula. if there are enough of them, enbloc deal will fail, unless other owners are willing concede

So this could be the reason why some of the owners are not willing to go en bloc.. Although developer only buys the land, the payout it is not fair to some owener afterall. Market values of units of same floor size can vary vastly in the same development..

[Wild Falcon]

How can it be unfair? You can still sell at the open market at a higher price, assuming u sell to a buyer who appreciates the high floor and the renovation. It so happens in an enbloc, the buyers does NOT value the high floor or your renovation because he only wants the land. Also, assuming your high floors gets better rental yield?

What I'm trying to say is, buying high floor does NOT guarantee u get the best return. That is fact. There is nothing unfair about it. If the buyer values your high floor, then u can sell at a premium. If he doesn't, then too bad. That is life.

So this could be the reason why some of the owners are not willing to go en bloc.. Although developer only buys the land, the payout it is not fair to some owener afterall. Market values of units of same floor size can vary vastly in the same development..

[Wild Falcon]

Precisely. The enbloc sellers low floor wil argue - they are just selling the land. PERIOD. The buyer doesn't care about the high floor or beautiful view. From the buyer's perspective, it is worth NOTHING. In short, it would be very difficult for the high floor residents to justify a premium, PRECISELY the BUYER doesn't care. And if the high floor don't want to sell and its 99LH and running down 80 years, they can say goodbye to their money. Only 20% of the value of land value is left. So in the end, they just have to decide to sell to preserve their wealth.

enbloc buyers wouldn't care as they pay one price for the whole development, not individual units
The proportion formula is what used to split the proceeds from the enbloc sale among all the proprietary owners, which is the where the problem is from

Normally the proportion formula will have only two factors: floor area and share value
the mixed will be recommended by the sales committee and approved by the proprietary owners
If high floor owners want more, they will not agree with the the formula. if there are enough of them, enbloc deal will fail, unless other owners are willing concede

[Wild Falcon]

Read properly - based on general valuation of a typical unit (floor area) and share value. Share value on the common areas. Floor area for your unit. High floor will never have a premium because it does not make common sense in an enbloc.
=======
General valuation – a value is estimated for each typical unit. This valuation is on an individual market basis, ignoring collective sale potential, floor level, facing etc.. The valuation of each typical type of unit would vary according to the floor area of each unit on the basis that the larger the unit, the lower the value per square foot. The apportionment for each unit would then be in proportion to that unit’s value in relation to the total value for the whole development.

The last one is the one i tot most ppl r using now.....tats y i say market valuations plus share value....

[Amber Woods]

The fact is that for owners of high floor unit and enjoying good views, these owners have already benefited by having higher rental. For owner occupiers, they already enjoy the good views for the premium they paid for their flats. So come to en bloc, these owners in real term do not loose out. They just have to accept that they have benefited from the higher rental yield or the enjoyment of the view in the past. So getting the same as the owner on the lower floor is fair.

[kimwah]

Let me share my practical experience of the recent en-bloc exercises.

For older development (70s-early 80s), the share value allocation was quite out of proportion. For example a unit of 1000sqf can have 4 shares, while the bigger unit 1800sqf can have 5 shares. In such a case, the CSC (at the advise of the marketing agent) will normally use a combination of strata area and share value for apportionment calculation (ex. 50/50, 60/40, etc), this is to ensure a more equitable distribution of money and closer to market valuation of the unit.

The marketing agent will not normally resort to using market valuation for apportionment, unless there are shop house unit within the enbloc development. In this case, the formula used will comprise a combination of market valuation, strata area and share value. Typically shop house (especially those facing main road) will end up having a higher weightage.

There will never be a perfect formula as every owner want to maximise their gain, hence it is a matter of give and take hence if u have objection on the apportionment method, do attend the meeting and raise objection. But ultimately it all depend on the vote so just have to go with the majority.

[tericia]

Can i ask a quick question:

if the majority vote that high floor doesn't get more +
the 1000 sqft gets 4 share while the 1800 sqft gets 5 shares,

doesn't that make buying smaller units on 2nd floor more worth it during an enbloc?

Let me share my practical experience of the recent en-bloc exercises.

For older development (70s-early 80s), the share value allocation was quite out of proportion. For example a unit of 1000sqf can have 4 shares, while the bigger unit 1800sqf can have 5 shares. In such a case, the CSC (at the advise of the marketing agent) will normally use a combination of strata area and share value for apportionment calculation (ex. 50/50, 60/40, etc), this is to ensure a more equitable distribution of money and closer to market valuation of the unit.

The marketing agent will not normally resort to using market valuation for apportionment, unless there are shop house unit within the enbloc development. In this case, the formula used will comprise a combination of market valuation, strata area and share value. Typically shop house (especially those facing main road) will end up having a higher weightage.

There will never be a perfect formula as every owner want to maximise their gain, hence it is a matter of give and take hence if u have objection on the apportionment method, do attend the meeting and raise objection. But ultimately it all depend on the vote so just have to go with the majority.

[SpinCity]

Can i ask a quick question:

if the majority vote that high floor doesn't get more +
the 1000 sqft gets 4 share while the 1800 sqft gets 5 shares,

doesn't that make buying smaller units on 2nd floor more worth it during an enbloc?

In a sense, yes. but this may only happen when enbloc is still in the very early stage.
Once the owners realize that there is a potential for their property to be enbloc, more and more of them will ask for the "enbloc price" and the difference between low and high floor units will become narrower