Race for the $1 billion collective sale

Even as the property market remains buoyant, concerns about finding a replacement home are rising. Will this cloud the prospects of collective sale hopefuls?

In January 2017, Chiang Kwok Shong had no interest in a collective sale when he was contacted by a property consultant. A director of several companies, Chiang was also chairman of the collective sale committee (CSC) at Faber Garden when it last attempted a collective sale in 2011. The reserve price then was $830 million. The tender period in 2011 coincided with a raft of property cooling measures rolled out by the government that year. And at the close of the tender, “nobody showed up at the box”, he says.
Faber Garden, which is on the market for $1.18 billion, is adjacent to the upcoming Bright Hill MRT station on the Thomson-East Coast Line (Credit: Samuel Isaac Chua/EdgeProp Singapore)
His trepidation over another failed collective sale was lifted when he saw several large privatised HUDC estates such as Rio Casa, Eunosville and Serangoon Ville sold in May and June last year. So, when the same property consultant contacted him again, he was more receptive. “I asked what the first figure for the reserve price was,” says Chiang. “When he said it began with a ‘7’, I was shocked at how low it was. When he countered with ‘8’, I said, ‘Okay, let’s talk.’”
Chiang rounded up his fellow members of the last CSC, and they decided to give the collective sale another shot. They invited five property consultants to make a pitch, and eventually selected CBRE as their marketing agent in August. After appointing the property consultant and legal adviser, the reserve price was set.
In September, the process of securing the 80% majority for a collective sale began. It took six months to get owners representing more than 80% of the share value and strata area to sign the collective sale agreement (CSA). “This was half the time it took the last time around when we secured 80% on the last day of the 12-month period,” says Chiang.
Chiang: This time around, it took six months to secure the 80% agreement, half the time it took the last time around when we secured 80% on the last day of the 12-month period (Credit: Samuel Isaac Chua/EdgeProp Singapore)