Over 10 Enbloc Properties Launch in Jan for Tender But no Bids (All will go under Private Treaty Sale)
Though the last quarter of 2018 favoured sale of only institutional grade properties, about a dozen En Bloc residential properties re/launched public tenders with closing dates in January 2019, thanks to the hopeful new year sentiments.
They have now gone under private treaty sales since there are no buyers’ bids on their sites.
On the whole, these offer some grand reasons in the En Bloc market to celebrate and enter into the Chinese New Year of the pig, that promises wealth and fortune.
The Sale Order for Brookvale Park was granted by the High Court on January 31st through amicable settlement between the dissenting and approving owners of the collective sales.
Hoi Hup Sunway stood through the long court case months since its acquisition in February 2018, treasuring its plan for redevelopment.
The excellent location and the suitability to develop large multigenerational apartments are seen as features that kept Hoi Hup Sunway to keep up its commitment through the gruelling waiting period, with cooling measures adding more to the woes.
The Tulip Garden is another classic example from which a lesson or two could be learned by the current En Bloc aspirants.
It was quite a long journey for the 162 residents, that commenced back in 2007 during the previous En Bloc fever and successfully completed the process this January through the dedicated efforts of the CSC and other stakeholders.
Located at #1 Farrer Road near Holland Village, it has potential to be redeveloped into 670 residential units with GPR 1.6.
No Blockbuster Sale in January 2019
Last year 2018 January, Singapore witness a blockbuster sale of Park West. It was sold at S$840.9 million to SingHaiyi Group, making it one of the Highest Collective Sale in 2018.
New Year started with a Fire and followed by over 37 enbloc sold, resulting total amount of over S$10 billion sales.
Horizon Towers with its S$1.1 Billion price tag was seen as the belle of the ball in January 2019.
So, was the national icon, Golden Mile Complex priced at S$800 million. But, none of them has found a buyer so far.
Golden Mile Complex Came Close to Find Buyer
Experts believe that if its “Conservation Tag” as post-independence heritage structure is removed, there is every likelihood to find an interested buyer.
The unsuitability or the inability to derive a smart plan accommodating this iconic 16-storey steeped terrace, brutalist structure has a say on this challenging project.
Subject to conservation, URA has consented to consider a GFA of 925,454 sq ft on this 1.3 hectares of land zoned commercial under Master Plan 2014.
URA has also suggested an integrated development, almost like the model of successful DUOS project, to have additional components like hotel and serviced apartments apart from the existing mix – retail, office and residential.
Marketing Agent, ET & Co is highly confident to find a competent developer through tender or private treaty sale.
Sr Director – Investment Advisory, Swee Shou Fern envisions the potential redevelopment to be an exciting work-live-play spot on the Beach Road corridor.
While Ms. Fern’s view reflects the ethos of the property market, it just remains to be seen if the owners would settle on their asking price S$800 million or less.
Price still Not Attractive Enough?
While the market gradually accepts the July 2018 and January 2019 measures affecting the En Bloc residential sales, the billion-dollar question under consideration is the asking price.
Is the pricing offered by owners not attractive enough? Or is the market still in wait and watch period?
When Park West at Jalan Lempeng got sold in January 2018 at S$840.9 million, “attractive price” was seen as the bait that brought the investors and developers into the bidding war.
The SingHaiyi Group acquired the property after bidding at S$850 psf ppr against the asking price of S$788.
But when Park View Mansions came down 22% from S$320 million to S$250 million at psf ppr S$969, it still couldn’t find a taker from the public tender that closed on January 18th, 2019 and has entered the private treaty period.
While Gilstead Court has reduced from S$168 million to S$153 million, the Lakeside Apartments has reduced drastically from S$240 million to S$205 million.
Whether the pricing strategy is able to cast its magic spell would be known by their tender closing date, February 27, 2019.
Therefore, time would shed light on what keeps the active players mute.
With a regular 10,000 plus residential units requirement year on year and without much projects with TOP beyond 2023, the waiting period, however, is not likely to last long.
Developers Shift Focus on Commercial Site
Meanwhile, whenever cooling measures were introduced (prior 2018, it was in 2011 and 2013) on residential properties, commercial properties rose in popularity by leaps and bounds.
Especially, the global situation highly motivates investors worldwide to turn their attention to the economically and politically strong island nation.
Investments on commercial properties are likely to increase with office rentals and hotels taking the lead in 2019.
While commercial properties cover a wide range of options like retail, office, hotels, HDB shophouse, strata title shops, conserved shophouses, and mixed developments, Real Estate Sentiment Index (RESI) has recorded great performance in these sectors in the recent quarters.
The Additional Buyer’s Stamp Duty (ABSD), Seller’s Stamp Duty (SSD), Total Debt Servicing Ratio (TDSR) etc. are nil on commercial properties, making them affordable and profitable investments over second or third residential investments in the present ABSD regime.
Since foreigners are eligible for commercial investments, many global companies are looking to invest in commercial properties, which is evident with intelligence from commercial property owners.
URA’s 4Q18 reports released on January 25th confirms a slower pace in private residential market.
It also confirms tremendous growth in office property market, thanks to the new and existing businesses that are occupying large chunks of space in swanky offices, while Business Centres religiously fill-up the left out spaces.
A recovery in retail property market has also been reported due to the top tourism and hospitality industry that is flourishing in the city-state, not to mention the inevitable hotel asset investments.
Obviously, the maiden month of 2019 announces “Advantage – Commercial Properties.”