En bloc fever: Sellers secure 80% approval at record speed

Normanton Park condominium located off Ayer Rajah Expressway has been sold collectively to Kingsford Huray Development for $ 830.1 million. (Photo: Knight Frank)

While the rise in the number of owners wanting to put their property for en bloc sale may not seem unusual for analysts – given the record-setting sums paid by developers at state tenders and en bloc sales – what surprised them was the speed by which sellers were able to push their site to the market, reported The Straits Times.

This comes as securing the required 80 percent approval from owners within a development is usually the most difficult part of an en bloc sale process.

Colliers International managing director Tang Wei Leng noted that this year saw a “greater sense of urgency and a more collaborative spirit among owners”.

In fact, 488-unit Normanton Park achieved the 80 percent mark in just 11 days, while 366-unit Florence Regency secured the 80 percent consensus in less than three weeks.

However, the breakneck pace has slowed lately as “higher concluded land prices start to raise sellers’ expectations”, said Tang.

She warned that unrealistic expectations along with higher development charges, an economic downturn or an increase in state land supply may all dampen the en bloc sale frenzy.

Most analysts, however, believe that the fever, which gradually started in 2016 and roared to life in mid-2017, still has some way to go.

The en bloc sales awarded surged from three in 2016 to 28 so far this year. Analysts expect more deals to close in 2018 as an estimated 80 to 90 projects are at their various stages of an en bloc sale process.

“As long as new launches continue to sell well and government land supply isn’t rapidly ramped up, developers will continue to buy land from the en bloc market,” said Wong Xian Yang, head of research and consultancy at OrangeTee.

 

This article was edited by Keshia Faculin.

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