Banks have been homing in on residents who have sold homes through an en bloc sale, a property transaction process which is throwing up a uniquely Singapore species of freshly minted millionaires who are collectively worth billions of dollars.
Last Monday, 11 United Overseas Bank bankers descended on the residents of Dunearn Gardens as they got their cheques for the sale of the 114-unit freehold residential development located off Newton Road.
The sale was made in April to a fully-owned unit of EL Development - the property arm of building firm Evan Lim Group - for S$468 million.
Each apartment owner got about S$2.69 million to S$7.98 million, said property consultancy Knight Frank in a news release then. Most received between S$3-S$4 million.
So far this year the number of units sold via en bloc stands at 2,900 worth S$10 billion, compared to 3,300 worth S$8.2 billion for the whole of 2017. This translates to an average payout of S$2.5 million for each unit in 2017 and S$3.4 million thus far in 2018.
The 2018 en bloc units are mostly in the prime districts, where payouts are higher, said Cushman and Wakefield's head of research Christine Li.
"They offered to bank in the cheques for us," said a Dunearn Gardens resident on the helpful UOB bankers milling around on Monday at her condo.
The bank offered a preferential 1.75 per cent interest rate for those who would deposit at least S$350,000 in a savings account for the next four months, the resident said.
"If you're an existing UOB client and if you recommend a new customer you'd get S$1,000 but the new customer must keep S$2 million in the bank for at least four months," she said.
UOB has a client referral programme where existing clients can get rewarded by as much as S$1,000 when their introduction results in the friend starting a relationship with the bank, said a bank spokeswoman.
Marketing to en bloc sellers is usually done at the invitation of the MCST, or the Management Corporation Strata Title, the managing body of the condo, one banker said.
Other banks which have reached out to en bloc sellers include OCBC, DBS Bank and Citi.
It can get crowded at some condos when a few banks gather to make their sales pitches.
One resident of Florence Regency said an enterprising Citibanker was standing by the lift on the ground floor when he got out.
"She said it was a better spot in trying to 'catch' residents but I'm already a Citi customer," the resident told The Business Times.
Other banks there included DBS, he said, adding that there was also a bank-sponsored buffet spread for dinner.
The 336-unit Florence Regency in Hougang was sold to Chinese developer Logan Property for S$629 million in October last year.
Charles Wong, Citibank Singapore head of retail banking, said the bank works closely with partner agencies to engage with potential customers including those from successful en bloc sales. In the Citigold or Citigold Private Client segment, prospective customers have access to a wide range of wealth management products and services, as well as events such as investment seminars to help them understand market trends and financial outlook, he said.
"Existing promotions which include cash or miles rewards are also extended to them. With Citibank's global experience and presence, we believe we are able to empower our clients to manage their wealth for the long term," said Mr Wong.
Said Tok Geok Peng, DBS head of secured lending: "An en bloc seller has varying needs such as finding a replacement home or preserving sale proceeds, hence we assist our customers who are en bloc sellers with a holistic and personalised approach based on their respective needs.
"For example, some may need a bridging facility to help them manage their cash flow if they need funds to purchase the replacement property before receiving the en bloc sale proceeds."
OCBC offers financial planning to the newly-minted millionaires, said Sunny Quek, the bank's head of branch and premier banking. "We organise masterclasses on financial planning at the bank's premises for residents of collective sale developments that we partner with. We hope that this will help the residents better manage the money they have received.
"Those who start a banking relationship with us are offered relevant deposit products."
This article was first published in The Business Times. Permission required for reproduction.