SINGAPORE EN BLOC 101: The ultimate collective sale guide

By
/ EdgeProp
|
March 27, 2018 11:43 AM SGT
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The red hot en bloc market from 2017 continues to sizzle this year, with about 15 properties sold en bloc in 1Q2018 alone. Just last week, Pacific Mansion along River Valley was sold for $980 million, the largest collective sale in over a decade and the second largest ever in history.
Naturally, the prospect of becoming overnight millionaires from these en bloc deals has sent many owners scrambling to put their properties up for collective sale.
In this article, we will answer all your burning en bloc questions with the hope of helping you make better property decisions.
1) How do I know if my condo has en bloc potential?
Contrary to popular belief, a property’s tenure or location isn’t everything. To better identify factors that contribute to a property’s en bloc potential, EdgeProp constructed our own en bloc calculator to determine the probability that a condo would be put up for collective sale.
The calculator is based on the logit model, which found that the following three variables increase the success of a collective sale. They are: a property’s age, number of units and plot value enhancement. They were statistically significant at 5% level. Find out more about our en bloc calculator, as well as your property’s en bloc potential here.
2) How do I start an en bloc attempt?
To start, owners have to elect a Collective Sale Committee (CSC) at a General Meeting. Requisition for the General Meeting requires at least 20% of total share value or of owners comprising 25% of the total number of owners.
Finding the right committee members is crucial for a collective sale’s success as they will act for all owners in a development. The CSC’s responsibilities include gathering consent from the requisite majority, appointing a property consultant and lawyer, and drafting the proposed reserve price as part of the collective sales agreement (CSA).
As such, responsible committee members should be appointed, and they should comprise owners across all unit types in a development. This is to ensure better cross-representation of different interests. Further, to avoid potential disagreements,...