Slow going for en bloc sales, especially those above $100m

[mr funny]

http://www.businesstimes.com.sg/sub/...64740,00.html?

Published July 22, 2011

Slow going for en bloc sales, especially those above $100m

Data shows Jan-June successful selling rate at just 51%, versus 65% in Jan-Dec 2010

By FELDA CHAY


(SINGAPORE) Home owners keen to sell their property through an en bloc sale were less likely to be successful in the first half of this year as compared with the whole of 2010, with estates going for $100 million and above the most difficult to sell.

Data published by property consultancy firm Credo Real Estate showed that plots put up for sale enjoyed a 51 per cent successful selling rate from January to June this year, as compared with 65 per cent for the whole of 2010.

Dragging down the overall selling rate were bigger sites, with more put up for sale this year to tepid interest.

According to Credo, 26 sites valued at $100 million and above were available for sale in the first half of this year, compared with 11 for the whole of last year.

Of the 26 sites, just six - valued from $100 million to less than $300 million - were sold, while none of those priced above $300 million were picked up. This translates to a success rate of 23.1 per cent.

Last year, three of the 11 sites valued at $100 million and above were sold, putting the success rate at 27.3 per cent.

In contrast, plots valued at below $50 million enjoyed an 87 per cent success rate for the first half this year, higher than the 76 per cent garnered by sites put up for sale from January to December last year.

The different reception that big and small collective sale sites saw stem from the uncertain property market environment, and the higher supply of land available under the Government Land Sales (GLS) programme, said Credo's deputy managing director Tan Hong Boon.

With the Singapore government intent on keeping property prices in check, developers are keen to see quicker turnaround times, especially for mega sites, he said. And collective sales - unlike plots sold under the GLS programme which are also large in size - generally take a longer time to change hands.

'For collective sales, you need to factor in the 3-4 months that it takes for the strata title board to give the sale order', for instance, said Mr Tan. Then there is the six-month period where the developer has to allow residents to stay rent-free before it can begin to redevelop the land.

In contrast, land available under the GLS programme has a more straightforward process, said Cushman & Wakefield Singapore vice-chairman Donald Han. 'The land sale can be completed within three months, while collective sales may take a while. And there is the unknown factor: developers cannot be sure that there won't be dissidents and appeals against the sale.'

What has added to the lack of interest in large en bloc sites is the huge land supply coming into the market under the GLS scheme, added Mr Han. In June, the Ministry of National Development (MND) released 17 residential sites on the confirmed list of the GLS programme for the second half of the year. Analysts have said that this is a bumper supply of land.

'The smaller collective sale sites are usually bought by boutique or mid-sized developers, who are not big enough to purchase land under the GLS,' said Mr Han. This explains why they are seeing a higher take-up rate.

Large sites that have been launched for collective sale this year include Pearlbank Apartments in Outram, which carried a $750 million price tag; Pine Grove condominium in Ulu Pandan, which asked for $1.7 billion; and Tulip Garden in Farrer Road, going for $600 million.

None of the eight estates priced above $500 million that were put on the market up till June have been sold. Last year, four such plots were up for sale, and none were snapped up.

[mr funny]

http://www.straitstimes.com/Money/St...ry_693255.html

Jul 22, 2011

Smaller sites garner $1.8b in en bloc sales

Only half of 65 sites sold in first half, with bigger estates left on the shelf

By Esther Teo, Property Reporter


COLLECTIVE sales in the first six months totalled $1.81 billion, but only around half the 65 sites on the market found buyers.

While smaller blocks were snapped up, the big estates - with big price tags - stayed on the shelf.

That meant the $1.81 billion sales value represented only 15 per cent of the total value of sites on sale, according to a Credo Real Estate report yesterday.

Small was beautiful in the first six months of the year, with 20 of the 23 sites of $50 million or under being sold. But no sites with indicative or estimated values above $300 million were bought.

These consisted of 11 estates with a combined value of $8.1 billion, including Hawaii Tower, Tulip Garden and former HUDC estate Pine Grove.

There were 33 sales in all, with the average deal size of $55 million being just up on the $49 million average last year.

Mr Ong Teck Hui, Credo Real Estate's head of research and consultancy, said demand for larger sites was soft due to their hefty asking prices.

The aggressive government land sales (GLS) programme - typically large plots with high absolute values - has also attracted major developers, leaving them with less appetite for the larger high-value collective sale sites.

'The suburban mass market where most GLS sites are located is relatively more active than the prime and mid-prime markets where the larger collective sale sites are,' said Mr Ong.

'The smaller developers priced out from the GLS market also tend to favour smaller collective sale sites which they find more viable.'

Private residential prices have moderated in recent months, with second-quarter flash estimates showing a gain of just 1.9 per cent. They rose 2.2 per cent in the previous three months.

With the residential property market at the upper end of its market cycle, Mr Ong warned that collective sales will likely face a more challenging period.

Buyers are more selective, while sellers remain eager to dispose of their homes at optimistic prices, he added.

'There has been a trend of collective sale sites, especially the larger ones, being unsuccessful and having to review their asking prices and relaunch for sale again,' he noted.

But Credo expects the momentum of collective sales to continue, with smaller sites staying more popular while larger ones will be down to price.

New sites will have to be more decisively priced as buyers have more options, the firm added.

The $1.81 billion in collective sales in the six months to June pipped the $1.77 billion in the same period last year, but it pales against the boom of 2007, when 87 sites worth $11.4 billion were sold.

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