http://www.straitstimes.com/Money/St...ry_785394.html

Cheaper sites form bulk of collective sales

Published on Apr 5, 2012

By Yunita Ong


ESTATES at the lower end of the price spectrum accounted for most collective sales over the past 10 years, according to a new report.

There were 184 sites sold at less than $50 million, out of the 336 deals completed between 2002 and last year, comprising 55 per cent of the action.

The reason is hardly a surprise: Cheaper sites mean more developers can make a bid, including small firms.

There were 72 sales of sites priced from $50 million to $100 million, making up 21 per cent of the transactions, but pricier sites were harder to sell.

There were only 45 deals in the $100 million to $200 million range, 22 for $200 million to $300 million, and 13 for sales above $300 million.

It is clear from the Credo Real Estate report that collective sales for sites priced above $300 million are more challenging to pull off outside of boom years like 2007.

The 10 deals that sold at above $300 million that year totalled $5.9 billion, making up 52 per cent of all sales for the year.

The largest collective sale on record, the $1.34 billion sale of Farrer Court, also occurred in 2007.

In comparison, buyers preferred lower-priced transactions during the economically weaker years of 2010 and last year.

During those two years, 72 of the 86 deals completed were for sites priced below $100 million.

Unsurprisingly, in terms of total sales value, sites priced below $50 million accounted for just $4.2 billion, or 15 per cent, of the decade's total of $28 billion.

The average deal size over the past 10 years was $83.6 million, while the median transaction was $44 million.

Most of the collective sale sites sold in 2010 and last year had generally been below $100 million each, The Business Times reported last year.

Last year, Laguna Park, Pine Grove and Tulip Garden failed to find buyers after starting collective sale attempts at more than $500 million.