( Going en bloc adds value to a building. Image by Ryan Tan, courtesy of Singapore Tourism Board.)
Bloc Party
Selling an apartment en bloc means that all apartment unit owners sell their properties as a collective whole, so as to earn substantially more than if they sold their units individually. It is also known as a collective sale. An en bloc sale is feasible when the plot ratio of the land can be increased, the land can be applied to better use and/or if the land’s potential is not being fully utilised.
Around 24 collective sale tenders have already entered the market, the newest project being Pearl Bank Apartments, going on sale just yesterday at $750 million, or $1,495 per sq ft per plot ratio. The tender closes on 25 May.
And there doesn’t seem to be any signs of the en bloc party slowing down. In fact, some experts suspect that 10 to 20 more sale sites could hit the market this month and the next. Others expect this year’s total collective sales to beat last year’s in volume as well as value. 34 sales worth $1.7 billion were closed last year. En bloc site buyers include foreign developers like China Sonangol Land, smaller boutique ones like Heeton Holdings, and even big players like Far East Organization and CapitaLand.
While January’s property market cooling measures may have dampened spirits, developers are still nurturing an appetite for such deals. But with so much uncertainty in the market, developers may find it too risky to commit to larger sites – as seen in projects like Tulip Garden, who’s yet to secure concrete deals – prompting expectations that smaller sites will be doing well this year. Many attractive sites in mature, well-established estates are taken by older projects, and the only way developers can access these sites is through a collective sale.
Analysts predict seeing sites from a wide range of districts going on sale this year, including the rise of more high-end collective sales. This is because prices of en bloc sites in suburban and mid-tier markets have risen while those of high-end sites haven’t, so as the price gap between high-end and mid-tier sites narrows, developers are bound to start taking notice.
