If there were any questions about collective sales quietening down this year, the slew of condominiums lining up to make new or renewed bids at the process in January alone would have put that to rest.
Larger condominiums over 1 million sq ft also trying their hand at en bloc
While smaller condominiums may find it easier to get the en bloc process started, the draw of the market momentum seems too strong to resist and even some larger developments are trying their hand at the process.
These mega sites or so called because of their large land area, are often close to 1 million sq ft in size. If is often more difficult for these larger sites to find buyers due to their higher reserve prices and other legalities. The process of getting the required percentage of approval from the residents alone is a mega task in itself.
The 1.1 million sq ft Braddell View was a good example of the success of such huge site.
The 893,000 sq ft Pine Grove, a former HUDC estate like Braddell View, is now making its third attempt at selling en bloc.
It is in the process of collecting signatures for the mandated 80% consent from its residents, but it seems that there are some obstacles yet to be resolved. The development has a reserve price of $1.65 million.
The 99-year leasehold Mandarin Gardens sits on a 1.07 million sq ft plot near East Coast Park. And they have just successfully began the collective sale process. It holds 1,006 units and 10 shops, a minimart, a restaurant and a kindergarten.
Should the sale be a success, the plot could potentially yield 3,000 new units. Analysts are predicting a base price of $1,300 to $1,400 psf ppr after taking into account the premium to top up the land-lease.
Going to market does not equal to guaranteed success
All the hype about condominiums going en bloc may not however translate to guaranteed success. Though 30 establishments were successfully sold for close to $8.7 billion last year, there were 6 whose tenders have closed but sales have not been concluded.
The size and location of the plots will oftentimes be the hurdle developers have to cross. And in other cases, internal conflicts may prevent the closure of a sale. There is however a 10-week period after the close of a tender, if the reserve price is not met, for private negotiation. And as asking prices increase, developers who have had quite their fill last year may be more picky and will calculate their risks more carefully.