_Property Bites Episode 3: Singapore's En Bloc Fever
Speakers:
Hector Tan | hector.tan@sg.knightfrank.com | +65 6228 7337
Ian Loh | ian.loh@sg.knightfrank.com | +65 6228 6823
Edited Transcript:
Q: Back in 2018, Singapore experienced an EnBloc (also known as collective sales) fever. Which however ended within the year as the cooling measures took effect. How has the market been since then?
With the introduction of the cooling measures and taking consideration the additional stamp duty on top of many other developer considerations, developers are reassessing the market and becoming increasingly cautious.
Q: Do you think there will be another enbloc cycle? When could that happen?
In every cycle, there will be up and downs. At the moment there are healthy sales in the residential market. As we look at the current supply in the market, activity is expected to pick up in 2022.
Q: The collective sales market was already slowing down prior to the pandemic. What could potentially revive the en bloc market? Looking at current land zoning and the masterplan 2019….where are the areas that could have enbloc potential?
Considering Singapore’s Master Plan and the various schemes (CBD incentive scheme, strategic development scheme) land which qualify for such schemes are valued differently and we have to adjust accordingly. An example would be the strata titled offices in the CBD area.
Q:Has the pandemic affected the collective sales market in any way?
Yes, as enbloc is a long process (1-2 years). It is a tough to plan ahead, owners are more wary to form opinions on commercial assets especially when the market is unstable.
Q: There are a couple of sites and buildings available on the market now, what types do you think will be of more interest amongst developers? Why?
At the moment, we are looking at 200-300 million dollars for residential developments, with less than 300 units. An enbloc is not impossible, once expectations are met and developments are appropriately priced a deal can be made.
Q: Believe the capital markets team current have a development up for sale on the market. Queen Astrid Gardens. Can you tell me more about this development?
This development of 16 apartmemts, all 2000 sqft, is zoned as queen good class bungalow. It is a residential / GCB redevelopment land located at an exclusive cul-de-sac in D10. Seated on elevated grounds, overlooking low-rise neighbouring estates. It also has the potential to redevelop into 4 GCBs/low rise apartments, subject to authorities' approval.
Q: For owners, what are some key indictors for “En Bloc Potential”.
We consider the usual life cycle of families, it tend to be families who have outgrown their home. As older folks who are unable to live comfortably in their walk up apartments, having difficulty with the stairs is a prime example. This is an indicator that owners will look elsewhere.
Q: For owners who intend to partake in the collective sales market….what advice would you say to them? Any thoughts on what to expect?
Professional’s help, such as lawyers, marketing consultants should not be overlooked. Maintaining good relations with your neighbors is equally important as well, you want to be able to live comfortably even if a deal falls through. Lastly, in a public tender the market will pay owners what they are worth hence setting the highest resale price might be the best option.
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