Market watchers have welcomed proposed changes to the en bloc sale regulations tabled in Parliament on Monday. They said the move is timely and could help stabilise property prices.
Farrer Court was among 111 estates sold at the peak of the en bloc market in 2007.
This year, there are only four deals so far and analysts expect the market to pick up as developers replenish their land bank.
The four en bloc sales this year are Changi Complex, Diamond Tower, Culford Garden and an industrial plot at Jalan Ampas.
And developers may well benefit from proposed new rules that will speed up the collective sale process, such as reducing the number of Extraordinary General Meetings required.
Christina Sim, director, Investment, Capital Markets, Cushman & Wakefield, said: “The truth is that the gestation for en bloc sales is just far too long usually when you get an en bloc ready for marketing. The market may have moved down to ease up and to shorten the gestation period is a good thing for the developers.”
Smaller developers, currently priced out of the state land market, may also benefit.
Observers also support rules to make it harder to restart an en bloc process after a failed attempt, including a two-year restriction period.
Tan Hong Boon, deputy managing director, Credo Real Estate, said: “This is a safeguard to the owners to minimise interference into their lives for certain projects or owners are too eager to re-initiate the en bloc process right after the failure. With that higher requirement for requisition, I think that ensures that there is sufficient interest from the owners to move ahead within the two-year period.”
The first re-try to convene an Extraordinary General Meeting to reappoint a sale committee will need the backing of at least 50 per cent share value or total number of owners.
For second or subsequent re-tries during the two-year period, 80 per cent will be needed.
Currently, the requisition threshold is set at 20 per cent by share vale or 25 per cent of the total number of owners.
Analysts said the changes may push up potential land supply and curb runaway property prices.
Some market watchers said about 50 developments are currently in the process of preparing for collective sale and they expect about 20 sites, mostly small and medium ones to hit the market by the end of the year.
Some of the potential en bloc sales this year include Neptune Court, Mandarin Gardens and Meyer Place.
The 528-unit Laguna Park at Marine Parade is also expected to convene an EOGM to elect a sale committee on May 2nd.
The deal fell through last year when they could not find a buyer for the property at S$967 million.
Source : Channel NewsAsia – 26 Apr 2010
Singapore Property
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