Channel NewsAsia

Collective sales of large HUDC projects to remain challenging

Of the 13 HUDC estates that have been legally privatised so far, only five have successfully completed the en bloc deal.

SINGAPORE: Analysts have said the collective sales of large HUDC projects will remain challenging amid a slowing property market.

Of the 13 HUDC estates that have been legally privatised so far, only five have successfully completed the en bloc deal.

Braddell View is the last of 18 HUDC estates to be announced for privatisation.

Analysts said that should it go through, residents will have greater flexibility in the management of the estate.

But those hoping to cash in on the en bloc market within the next few years could be disappointed.

Ku Swee Yong, CEO of Century 21 Singapore, said: "Braddell View apartments have been transacting in the last year around plus, minus S$800 per square foot (psf). So if they successfully privatise and went into an en bloc exercise, within the next two years, there have got to be developers who are willing to pay to each home owner a premium that is well above the S$800 psf mark that they could achieve by themselves selling individually.

“If the developers are only willing to pay let’s say S$900 psf, then that premium of 12-15 per cent is probably not attractive enough for 80 per cent of the owners to sign up for the en bloc."

Privatised HUDC projects like Laguna Park, Tampines Court and Eunosville have been launched for collective sale in recent years, but there have been no takers.

To date, only five have been successful.

They include the S$1.3 billion Farrer Court site where CapitaLand's d'Leedon is now situated, Amberville, Gillman Heights, Minton Rise and Waterfront View Estate.

Analysts said developers still have a strong appetite for land, looking at the number of bids from recent government land tenders.

But in view of the current market conditions, they said developers are likely to prefer smaller plots, as well as the comparatively hassle-free land acquisition process under the Government Land Sales Programme.

Market watchers said larger sites with an asking price of over S$1 billion would be a tough sell, and presently, the sweet spot for en bloc transactions is probably under S$200 million.

Donald Han, managing director of Chesterton Singapore, said: "The majority of these HUDC sites would probably, upon completion, see 1,000, 1,500 maybe 2,000 units. A lot of developers are not comfortable to enter in a market where you probably see a 30 per cent drop in volume of sales year-on-year.

"A lot of developers would probably want to see higher uptick in terms of your take up, new home sales and then you will see risk coming back for some of the larger sites, for developers to take risk and partake into such large HUDC sites that offer thousands of units into the market."

Meanwhile, Channel NewsAsia understands that residents at Eunosville have lowered their initial asking price of S$688 million for the site, and are in the midst of signing the collective sale agreement.

A resident shared that the sales committee has obtained approval from about 40 per cent of the owners.

Its marketing agent Jones Lang LaSalle said it is unable to comment on both the pricing and the sale process. 

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