En bloc attempts or deals less than 10, 20 years after building completion

Killiney 118
PHOTO: 99.co

Usually, when we read about en bloc deals or collective sales, we learn that the property has been around for decades. They are usually built in the 1970s, 80s or 90s, so after many years of wear and tear, the building and/or land they sit on is ripe for redevelopment after 30 to 50 years.

We’ve covered some, such as Golden Mile Complex, Park View MansionsEuro-Asia Apartments and Chuan Park, just to name a few.

But did you know that there are a few developments where some residents have decided to go into collective sale earlier?

There were even two projects which was sold to another developer or entity less than three years after being completed (we’ll get to that).

Anyway, for an en bloc to happen in a project less than 10 years after its completion, 90 per cent of the owners have to agree to the deal.

If the project’s more than 10 years old, then at least 80 per cent have to vote yes.

There are several reasons why a fairly new development would enter into a collective sale situation earlier than usual. Here are a few reasons:

  • There is an en bloc craze. This was the case in 2017, and 2018 when many homeowners jumped on the bandwagon and developers were actively hunting for existing developments to buy on the cheap. It was also the period when some foreign or publicly-listed developers had trouble fulfilling the Qualifying Certificate (QC) conditions, where all units must be sold within two years of completion.
  • Extremely small quantum. As we move forward in a post-pandemic world, smaller boutique developments of about 50 units or less, with price tags no higher than $80m may find interest from developers eager to expand their land banks, no matter how small. This is because the cash outlay, associated risks and costs (eg. Development Charges and ABSD for developers) are lower, so interest may be higher. For the resident-owners, as their quantum is smaller, there’s a higher possibility of a 90 per cent approval. This means greater potential for a win-win.
  • Government Land Sales have become competitive. Other than buying through private collective sales, developers can bid for land through Government Land Sales. However, as lesser tenders are issued, developers face intense competition and may end up with no wins. Maybe this golf course suggestion makes sense…

Killiney 118 and 62 Wilkie Road

Two freehold condo projects in District 9 (River Valley) – Killiney 118 and 62 Wilkie Road – have gone into the collective sale process with tender submissions closing in September this year.

Nine-year-old Killiney 118 is a six-storey apartment block zoned as a residential site with commercial (currently a restaurant) at the 1st storey. It was launched six days after the 2010 government cooling measures, and construction was completed in 2013.

It has made two en bloc attempts this year – the first in April, and the second is ongoing.

Consisting of 1- and 2-bedroom units, the 30-unit project sits on 7,688 sq ft of land, and has a Gross Floor Area of 30,327 sq ft, with a current plot ratio of 3.94.

With a guide price of $76m, that equates to $2,506 psf. The condo is within a four-minute walk to Somerset MRT station.

62 Wilkie Road. PHOTO: 99.co

62 Wilkie Road is a smaller project that sits on 2,542 sq ft of land and has a gross plot ratio of 2.1.

It TOPed in 2003. With its en bloc attempt this year, that’s less than 20 years after completion.

The six-storey development consists of 3 double-storey apartments occupying 5,597 sq ft of strata area. With a guide price of $9.2m, that translates to $1,644 psf for the strata area.

Apparently, the property is near six MRT stations (yep, 6!), which are Bencoolen, Bras Basah, Bugis, Dhoby Ghaut, Little India and Rochor. The closest would be Bencoolen on the Downtown Line, which is about 7 minutes walk away (Dhoby Ghaut is 8 minutes away).

iLiv@Grange and Pearl Island (Sentosa Cove)

Two developments that made headlines in 2016 were iLiv@Grange and Pearl Island on Sentosa Cove.

iLiv@Grange, a District 10, freehold condo off Orchard Road, was sold by its developer Heeton Holdings for $95m in 2016, only three years after it was completed.

The 30-unit development, consisting of 1-, 2- and 3-bedroom apartments and two penthouses, had a land area of 20,325.5 sq ft and a built-up gross floor area of 58,534 sq ft. With the sale, that equates to $1,623 psf for the strata area.

Heeton Holdings, a listed company, sold its entire shareholding interest in Heeton Residence (the owner of iLiv@Grange) to a group of Singaporean private investors.

The sale to the group came before Heeton was due for its second Qualifying Certificate (QC) sales deadline.

QC is a condition imposed on foreign property developers (including listed companies, as shareholders can be foreigners) where the development must be finished in five years, and all units sold two years after completion.

If a developer fails to fulfil these conditions, it will have to pay extension charges between 8 per cent to 24 per cent of the land cost for the 1st, 2nd or 3rd and subsequent years. Subsequently, a revised 2020 law allows a publicly listed developer to be QC-exempted if it has substantial connections to Singapore.

Due to adverse market conditions then, Heeton had not sold any of the 30 units then, so it paid for an extension worth 8per cent of the $72.8m land cost (roughly $5.82m) in the first year. A second extension would mean paying 16 per cent (or about $11.65m).

By taking Heeton Residence private (the company has since been renamed) with full ownership by Singaporeans, the firm was able to seek a clearance certificate from the authorities and apply to cancel the QC.

As for iLiv@Grange, it is now being redeveloped for the upcoming 60-unit Grange 1866, which is due to be completed by 2024.

In May 2022, a two-bedroom, 764 sq ft unit there was sold for $2.3m, registering a record $3,007 psf for the freehold project.

Similarly, around the same period in 2016, there was a bulk sale of 10 bungalow villas on Pearl Island – one of five man-made islands in Sentosa Cove – to a Singapore company called SRIF (whose parent company is Evia Real Estate, co-founded by Leslie Lim and Vincent Ong).

While nine of the 19 villas in the project were sold, the remaining ten unsold villas would subject foreign Beijing-based developer Ximeng Land to QC penalties.

Completed in 2016 with built-up areas from 6,598 to 11,270 sq ft, each villa has four to seven bedrooms, unblocked 360-degree views of the waterways, private pools and is surrounded by Fukugi trees (or Happiness trees).

All of them are on 99-year leases.

According to Business Times, SRIF bulk-bought the ten villas, at around $120 to $130m ($1,500 to $1,600 psf), through a sale of shares transaction, meaning they purchased the entire equity of Ximeng Land.

Caveats lodged for the prior villa purchases saw prices at $1,904 to $2,228 psf.

In 2007, Ximeng Land paid $215.65m ($1,687.50 psf per plot ratio) for the 159,736 sq ft site.

Sentosa Cove. PHOTO: Straits Times file