Enbloc redevelopment

[Joseph22]

the height limit should be pretty high if we look at developments like twin heights, calarasi, etc etc

 

then the rest should depend on how much is the market price liao. But one thing to note though. The current market, i dont think its possible to get a 100% over market price liao.

[Darryn]

Wow, there's a lot of questions here.

 

First of all, is there an enbloc sales committee? When were they appointed and is it representative of the development?

 

1. The enbloc sales committee should ask for three quotes from three different agents on what they think the place can sell for

2. Check the terms and conditions of the agents

3. Can do an "indication of interest" to really see how many want to sell (non binding)

4. Be aware that once you formally start the process your unit becomes HARD to sell, until the process either lapses or finishes

5. What share of the proceeds you will get in the case of an enbloc doesn't neccessarily follow your share value - the enbloc committee will set a policy on how the proceeds are to be distributed in the case of a sale.

 

This is just for a start.....

[Acemundo]

brother, you asking for which friend? hee

 

share ratio determines how much cost and proceeds a unit can share in the en bloc proceeds.

 

plot ratio only determines the potential to go enbloc. I think 2.8 is bare minimum.

[Darryn]

brother, you asking for which friend? hee

 

share ratio determines how much cost and proceeds a unit can share in the en bloc proceeds.

plot ratio only determines the potential to go enbloc. I think 2.8 is bare minimum.

 

This isn't true - the sales proceeds can be divided by whatever means the owners decide - subject to approval by the strata titles board.

 

Bigger units or more desirable units can be offered a larger share. Deciding on how the proceeds are to be shared can be one of the most contentious issues in the sale.

 

The share ratio determines how many votes that unit (share) gets in any ballot

 

 

[Acemundo]

thanks for the clarification. I had thought that with the contentious issue of allocating the proceeds in a non-standard way, most committee would use the share value as the basis for allocation, much like cost of maintenance of the condo.

[Darryn]

thanks for the clarification. I had thought that with the contentious issue of allocating the proceeds in a non-standard way, most committee would use the share value as the basis for allocation, much like cost of maintenance of the condo.

 

Yep it does form the basis, but taking my own direct experience as a anecdote (I actually sat on the first enbloc committee)

 

Our development had 17 shoplots and 34 houselots.

 

Each lot had a share value of 1 (don't ask me why, when the place was set up 40 years ago lots of things were done poorly)

 

The shop lots were about 60 % bigger in size than the house lot, and valued at about twice the value.

 

So already we have three potential ways of splitting the proceeds (by share value, by square footage, by pro-rated market value)

 

We decided that each shop lot would be valued at 2 x each house lot.

 

Do remember that if residents feel the money is not split fairly, they can vote against the sale. Further, how the money is shared is spelt out BEFORE voting starts.

 

In an enbloc sale, if there is anything less than 100% agreement it must get the approval of the strata title board - even if it meets the 80 / 90 % legal thresh-hold, the board can still turn it down.

 

I have also heard of cases of units that "hold out" on signing the agreement being bribed by being offered a greater share of the sale proceeds (although I have no first hand knowledge of this)

[Acemundo]

HI Darryn,

 

What you say makes sense. I guess if share value approximates fair value to the sellers, they will support it. If it doesn't, especially in the example of the case you cited, they will go for another way of allocation of the proceeds which requires majority and strata title board approval.

 

Must have been pretty interesting to be involved in it!

[Darryn]

HI Darryn,

 

What you say makes sense. I guess if share value approximates fair value to the sellers, they will support it. If it doesn't, especially in the example of the case you cited, they will go for another way of allocation of the proceeds which requires majority and strata title board approval.

 

Must have been pretty interesting to be involved in it!

 

It was, but I am sure pleased I'm not anymore. At the time I argued very strongly that we must have a shop representative on the committee...the act makes for interesting reading if you have the time.

[Tohdj]

Wow, there's a lot of questions here.

 

First of all, is there an enbloc sales committee? When were they appointed and is it representative of the development?

 

1. The enbloc sales committee should ask for three quotes from three different agents on what they think the place can sell for

2. Check the terms and conditions of the agents

3. Can do an "indication of interest" to really see how many want to sell (non binding)

4. Be aware that once you formally start the process your unit becomes HARD to sell, until the process either lapses or finishes

5. What share of the proceeds you will get in the case of an enbloc doesn't neccessarily follow your share value - the enbloc committee will set a policy on how the proceeds are to be distributed in the case of a sale.

 

This is just for a start.....

 

the enbloc sales committee has just been formed last week. we didn't intend to sell this place until this discussion of enbloc suddenly came.

[Tohdj]

brother, you asking for which friend? hee

 

share ratio determines how much cost and proceeds a unit can share in the en bloc proceeds.

 

plot ratio only determines the potential to go enbloc. I think 2.8 is bare minimum.

 

heehee...for a "friend" lah....

 

i need to find out our share ratio first to proceed. i am actually doing my own research instead of relying purely on the sales committee's recommendations.

[Tohdj]

currently...the method for division of the sales proceed has not been decided yet. we only formed the sales committee last week.

 

so for your enbloc...when did it take place? how much more did u gained than if you had sell your unit in the open market?

[Tohdj]

then the rest should depend on how much is the market price liao. But one thing to note though. The current market, i dont think its possible to get a 100% over market price liao.

 

heard from the marketing agent that the enbloc for Dragon mansion didn't go through due to the asking price of $1.1k. so they advised us to look at a price of S$950. but i was thinking that if the developer is able to build a lot higher than what the current units are....then perhaps we can ask for more.

[Tohdj]

when a developer buy your place... they are buying the land rather than your house... to them your house is obsolete as it will be torn down.......

 

just call the management and ask for your share ratio.... and on the way you can ask them how much is the sinking fund now.

 

i read in newspaper that usually enbloc sales has a premium over selling the same unit in the open market. what kind of premium range is the norm?

[Galantspeedz]

i read in newspaper that usually enbloc sales has a premium over selling the same unit in the open market. what kind of premium range is the norm?

 

 

hard to tell you what is the premium..... as i am not very familier with balestier area......

 

but when selling, you may think a developer will earn alot but you have to factor in several costs. land cost, building costs, marketing costs, etc..

 

disclaimer: i am not property agent and what i share is what i learn from my mum. she does property on and off nowadays.

[Smhomie]

i read in newspaper that usually enbloc sales has a premium over selling the same unit in the open market. what kind of premium range is the norm?

 

For the last 5 years, industry standard adopted for en-bloc premium has been averagely in the 30-35% range.

 

Effective premium will be more since the open market pricing would have taken into account location, built quality, size, facade direction, general surroundings, rental yield, maintenance costs, amenities etc......

 

Forget relocation costs and all that rubbish that people tend to factor in. It just plain greedy to want more, en-bloc will never happen if that's the case

 

Sell and take proceeds, rent at depressed market then buy later. In the meanwhile, buy 1 or 2 KL downtown condos to rent out (good rental yields) or Canada/USA properties by buying up their remaining mortgage loan.

 

This is the way to build wealth through property investments over the next 6 years.

[Darryn]

It never sold, the owners were all crazy greedy and it was at the end of the last enbloc boom. Our development is really a long long grandfather story, and is a unique case at URA / BCA. (the site is a white site, but has a building height limit, so kinda weird)

 

They were asking for a premium of almost 300% over market value. Problem is the property is freehold title, and the units are reasonably sized - replacement units of similiar size in the same area go for about 2x the value now, and they are 99 yr lease

[camrysfe]

hi, there are the old and new method of calculating share value. My estate happens to be using the old method of calculating share value(which favours smaller unit) and this old method of share value was utilised in the recent enbloc proposal apportionment payout. However with the latest cooling measure in place, I foresee a very little chance of going enbloc.

 

I will like to ask if let's say the estate goes enbloc in the next cycle maybe 10 years later, will the old method of calculating share value be used ?

[Victor68]

the idea of enbloc is good but when perfectly tenantable good buildings are being torn down, i think it is bad. 

 

people who just bought into a development may suddenly find themselves in a situation where they lost money just because others wish to cash out.

 

there is no perfect laws but buying into a condo requires careful and informed decision. maybe it is timely all purchasers are rewuired to be explained all these pitfalls before they make that commitments.