En bloc hopefuls to press on with ongoing tenders despite fresh property cooling measures

SINGAPORE: Projects hoping to be sold en bloc are marching ahead with their ongoing tender exercises, despite the potential fallout from fresh property cooling measures.

The measures, announced last week, are expected to take the wind out of the sails of the residential collective sale market, analysts said previously.

This is due to a heftier 35 per cent Additional Buyers’ Stamp Duty (ABSD) that developers must pay, should they fail to complete and sell all units within five years – which analysts said will make developers more cautious with their land bids.

Nevertheless, marketing agents CNA spoke to said their clients' current tender exercises will still proceed without any changes.

PropNex Realty, which is marketing the sale of Lakepoint Condominium, said the development's collective sale tender will close at 2pm on Dec 22, as planned.

“We have no further comments to add at this point,” it said in response to questions.

Cushman & Wakefield, marketing agent for freehold landed development Dublin Lodge and mixed-use site Sixth Avenue Centre, said ongoing tenders for both will also continue. The tenders will close on Jan 4 and Jan 6 respectively.

“In general, the committees we are working with were surprised by this new set of cooling measures, despite the fact that the grim prospect has been hanging over everyone’s head for the last month or so," the firm told CNA.

“The cooling measures were somewhat expected; it was just a matter of how severe and when they would be implemented.”

But it added that the projects' current asking prices – S$65 million for Dublin Lodge and S$86 million for Sixth Avenue Centre – are “very reasonable”.

"Our current asking prices are still pretty much at pre-COVID market levels as these were fixed in 2019," said the firm, adding that they "have not factored in the recent market run-up as yet".

Colliers Singapore, which is managing the sale of Baode Building and a site at Hillview Terrace, said tenders for these will continue and "decisions will be made based on the submissions”. Their tenders close on Jan 18 and Jan 20 respectively.

Savills Singapore said the tender for The Beaumont and Tanglin Shopping Centre will also still close on Jan 20 and Feb 22 respectively, as planned.

COMMERCIAL PROJECTS NOT IMPACTED BY ABSD

Developments zoned for commercial use, such as Sixth Avenue Centre and Tanglin Shopping Centre, are exempt from ABSD rates.

Coupled with the higher risks for residential development, some attention could be directed towards the commercial and industrial markets, said analysts.

Savills’ managing director of investment sales and capital markets, Jeremy Lake, noted that response from developers to the marketing of Tanglin Shopping Centre has been “very positive”, even after the cooling measures were announced.

Sultan Plaza, located near Kampong Glam, was also put up for collective sale on Dec 22 with a price tag of S$360 million.

Marketing agent Teakhwa Real Estate said it expects strong interest due to the project's "reasonable asking price and palatable quantum", alongside its downtown location.

"With strong sales from the nearby developments such as The M, Midtown Modern and Midtown Bay, we are expecting keen competition from developers," said the firm. The sale tender will close on Feb 10. 

Another nearby site up for collective sale is the iconic Golden Mile Complex, whose tender closes on Feb 28. Its marketing agent, Edmund Tie, declined comment.

DEVELOPERS WILL BE SELECTIVE

Developers will be pickier about their residential land purchases, said Professor Sing Tien Foo from the National University of Singapore’s (NUS) Institute of Real Estate and Urban Studies.

“The bigger plots will get more and more difficult (to work with) because of the 35 per cent ABSD. To sell big projects – above 500 units – is quite challenging,” he told CNA previously.

Cushman & Wakefield’s head of research, Wong Xian Yang, added that development risks have also increased, due to factors such as ongoing construction uncertainties.

But amid “very low levels” of unsold inventory of homes, developers are expected to continue sourcing for land in both public and private domains, albeit “with a more cautious behaviour”.

PropNex’s head of research and content Wong Siew Ying pointed out that the impact on the en bloc market may be "uneven", with large sites and those in the Core Central Region facing more challenges.

But she added: “Collective sale sites in the (Outside Central Region) could still find buyers provided the owners are realistic on pricing.”