Shunfu Ville sale fuels en bloc market

The $638 million collective sale of Shunfu Ville has stoked the interest of developers looking for potential redevelopment sites, as well as homeowners hoping to dispose their older properties, reported The Straits Times.

Located close to the Marymount MRT station, the 358-unit privatised HUDC estate changed hands in May, with each owner pocketing around $1.78 million, or a 50 percent premium over a typical unit’s price. It is also the first en bloc transaction in almost a year, and the most expensive since 2007.

“There is interest from developers, which is why we are stepping up our search for suitable projects,” said Karamjit Singh, International Director at JLL.

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Shortly after the Shunfu Ville sale, property consultancies began receiving inquiries from developments that could be potentially sold en bloc, while other estates have started the process.

For example, some residents at The Capri condominium are testing the waters for an en bloc deal by inviting parties to submit prices. Meanwhile, a privatised HUDC estate in Potong Pasir Avenue 1 is gathering signatures from the owners. Reportedly, around 60 percent have consented to the sale, but this is still short of the 80 percent minimum approval required.

Developments that have already attempted this move twice but failed on both occasions are also trying their luck again. These include the 84-unit Changi Garden, as well as the privatised HUDC estates of Eunosville and Tampines Court.

In fact, the en bloc sale committee of the mixed-use Changi Garden project off Upper Changi North Road appointed lawyers and a marketing agent in May for its latest collective sales exercise.

Meanwhile, residents at the 330-unit Eunosville are understood to be restarting the en bloc process, while those at the 560-unit Tampines Court are writing up a sales agreement.

According to Lee Liat Yeang, Senior Partner in Dentons Rodyk & Davidson, “owners of privatised HUDC developments are under pressure as their estates grow older and the responsibility of upgrading rests on their shoulders now.

“As time passes, the value of topping up the lease (of site) will go up and, correspondingly, the amount of money that goes to owners in an en bloc sale will come down.”

Moreover, this is an opportune time for collective sales, as the authorities have tapered down the Government Land Sales (GLS) Programme, noted Alice Tan, Knight Frank’s Research Head for Singapore.

However, bidders are expected to offer more realistic prices in light of the sales deadlines under the Qualifying Certificate and Additional Buyer’s Stamp Duty (ABSD) rules, added Shaun Poh, Executive Director, Capital Markets at Cushman & Wakefield.

“Developers are low on their land stocks so quite a number will be keen to restock. But they are also very mindful of whatever sales backlog they may have.”

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Shunfu Ville sale fuels en bloc market

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