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How likely will your condo be up for en bloc?

fiona.ho@edgeprop.sg

The collective sale (en bloc) momentum continues and condo owners are moving fast to catch the wave. Sure, success isn’t guaranteed, but the prospect of becoming overnight millionaires from these en bloc deals has sent many owners scrambling to put their properties up collectively in the market. Meanwhile, others may be wondering if their home is a viable candidate for en bloc.

How do you know if your property has en bloc potential? What are some factors that can contribute to a successful collective sale attempt? To identify these factors, EdgeProp constructed our very own en bloc calculator to determine the probability that a condominium would be put up for collective sale.

The calculator was launched in 2017 and is based on the logit model, also known as logistic regression. It found that the following factors – age, number of units, and plot value enhancement impact the probability that a development would be put up for collective sale. They were statistically significant at 5% level:

Variables that could enhance a collective sale’s success, based on the logit model.

 

Since its launch, the calculator has accurately “predicted” the likelihood that a development would be put up for collective sale. For instance, 25 of 35 properties that were sold on collective sale between January 2017 and March 2018 were given a ranking of “>80%” or “very likely” to go en bloc.

This includes Hollandia, a 48-unit development in District 10 that was recently sold for $183.4 million – a whopping $20.23 million above its reserve price of $163.15 million, or $1,515 psf ppr.

A screenshot from EdgeProp’s en bloc calculator.

 

Meanwhile, projects such as Riviera Point, Mayfair Gardens, Florence Regency and Tampines Court were given a ranking of between “60% - 79%” or “likely” for their probability of going en bloc.

 

How en bloc properties sold between January 2017 and February 2018 were ranked by EdgeProp’s en bloc calculator:

 

But how likely is your condo to go en bloc, really?

Based on collective sales transactions taking place between January 2017 and March 2018, we have observed the following factors:

Note: Figures are based on collective sales taking place between Jan 2017 and March 2018. Information is accurate as of 5 March 2018.

 

However, beyond a development’s inherent traits, there are also external factors that could impact the success of a collective sale, including market cycle and availability of quality sites on the Government Land Sales programme.

For instance, the 560-unit Tampines Court, a former Housing and Urban Development Company (HUDC) estate, was sold in August 2017 for $970 million despite its large quantum. It is the largest deal for a former HUDC property since Farrer Court changed hands for $1.34 billion in 2007.

Its attractive location, regional-centre address and proximity to key commercial nodes such as Changi Airport and Changi Business Park are said to have contributed to the massive price tag. Further, there have been very few new projects in Tampines. 

The 560-unit Tampines Court was sold in August 2017 for $970 million despite its large quantum.

 

However, the sales process of Tampines Court is believed to have been delayed as developer Sim Lian Group awaits Planning Permission approval from the Urban Redevelopment Authority (URA).

Another example is the 336-unit Florence Regency in Hougang Avenue 2. The former HUDC estate closed a collective sale under private treaty after Chinese developer Logan Property (Singapore) agreed to match the independent valuation of $629 million for the property.

Florence Regency is one of the latest few privatised HUDC estates in the north-east region. The future development on the site will enjoy unobstructed views as it is located next to landed housing estates and across the Hougang Stadium, and the sports and swimming complex.

Florence Regency, which closed a collective sale under private treaty in October 2017, is one of the latest few privatised HUDC estates in the north-east region.

 

Florence Regency’s sale brought the total number of former HUDC estates that have been sold in collective sales since 2005 to 12. Meanwhile, Braddell View, Pine Grove, Laguna Park and Chancery Court have begun the collective sale process.

Want to know if your condo could be next to go en bloc? Find out with EdgeProp’s en bloc calculator here!

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