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Freehold residential block in prime District 9 up for en bloc sale

(image: Edmund Tie)

Freehold residential block in prime District 9 for en bloc sale at $24 million

freehold residential block
(image: Edmund Tie)

2, 4 and 6 Mount Emily Road have been launched for collective sale. The freehold residential block for sale by tender have the consent of 100% of the owners said the sole marketing agent Edmund Tie & Company which launched the collective sale on June 29.

The freehold residential block, located at the exclusive Mount Emily Road, comprises 3 adjoining units of 3-storey buildings with basement and attic, sitting on a total site area of 515.5 sq m (approximately 5,549 sq ft) with an existing gross floor area of 1,499.3 sq m (approximately 16,138 sq ft). Under the Master Plan 2019, the property is zoned for residential use at plot ratio 2.1, within the Mount Sophia secondary settlement conservation area. Subject to the authorities’ approval, the property may be strata subdivided and a new rear extension of up to 36m SHD (Singapore Height Datum) may be erected.

Nestled in a tranquil enclave near Mount Emily Park, the freehold residential block enjoys an exciting location at the fringe of city centre, within close proximity to the CBD and Orchard Road. The neighbourhood is a vibrant mix of arts, heritage and cultural districts, and the property is well-served by a wide array of amenities. The Little India MRT interchange serving the Downtown and North East MRT lines is a mere 200 metres away, providing easy accessibility to all parts of Singapore.

Executive director of investment advisory, Swee Shou Fern commented: “2, 4 and 6 Mount Emily Road present an exceptional opportunity to transform this well-located property to a boutique residential development, which can be subdivided into strata-titled apartments for sale.”

“The astute investor can also explore keeping the property as a single residential block for co-living residences, subject to planning approval, which is fast gaining popularity among millennials and expatriates. The 100% owners’ consent offers certainty in deal completion timeline,” she added.

The guide price for the freehold residential block is $24 million, reflecting approximately $1,485 per square foot on existing gross floor area.

The tender exercise for the freehold residential block will close on Tuesday, 11 August 2020 at 3pm.

Although the collective sale fever has died down, some smaller developments are still trying to find buyers and investors even in this climate. Ten years ago, when the collective sale scene was more active a number of en bloc sales were called off because the developers were weak and could not raise sufficient capital and loans to complete the transactions. This proved disappointing for some subsidiary proprietors (SP) as they had  committed to purchasing their next homes before the en bloc sales were aborted.

What happened then is unlikely to be repeated this time around as most developers have built up a huge war chest of capital over the past few years. But still, SP and strata apartment unit owners should get involved and understand the deal that is being put together.

KEEPING TRACK OF MILESTONES

As an SP, you should always keep track of all the milestones leading to the conclusion of your en bloc sales-  milestones like when your Sales Committee (SC) was formed, Extra-Ordinary General Meetings, Updates from SC, etc. Most importantly don’t rely on any knowledge or information you may have gleaned from your en bloc experience in the past.

The en bloc regulations have been more firmly tightened, and the process strictly regulated in the past few years.  The tighter laws we now have means the responsibilities of the SC, the property consultants, and the lawyers, are all well defined, which provides for better transparency of the en bloc processes.

IT’S NOT OVER TILL IT IS OVER

Don’t think that just because a qualified developer has made a bid at or above the reserve price, and just because the SC has agreed to accept the bid on behalf of the SP, the transaction is considered done. Some SP may still raise objection to the en bloc sales and if they do, the Strata Title Board (STB) is obliged to hear their case. The entire en bloc transaction can be stopped from proceeding further if the dissenters can prove that the SC  did not abide by correct procedures.

TIME TO MOVE OUT

Once the STB gives the stamp of approval for the en bloc sales, the winning developer will have to give you at least 6 months for you to move out of your property. The funds from the en bloc sales would also have been transferred to you by this time, but a significant portion of your proceeds will go towards offsetting any existing loans you may have with the bank, as well as any CPF funds used for purchase of your previous unit. The 6-month period may be sufficient time for most SP to arrange sufficient finances to find another suitable home.

CONSIDER ALL OPTIONS

Whether you are considering to rent or to downgrade to a smaller apartment, consider all options carefully. Everybody’s needs and comfort-levels are different. Just because one housing option works for someone, it doesn’t mean that the same option will work for you and your family. As soon as you are sure that your en bloc sales will conclude without any hassle,  you should be speaking to a trusted property advisor. The advisor would be best placed to guide you through your next housing option.

Timeline and Milestones of an En Bloc Sales Process

In order to understand how and whether to go into an En Bloc sales and sign on the Collective Sales Agreement (CSA), you will need to know how long it will take you to complete the En Bloc sales in case it is successful.

Stage Milestone Duration (Est.) Timeline (months)
1 1st EOGM to appoint CSC. 1 month 1
2 2nd EOGM to appoint Marketing agents, solicitors and approve CSA. 1-2 months 2 – 3
3 Signing of Collective Sales Agreement (CSA) 12 months 3 to 15
4 Owners meeting prior to launch of public tender for sale 1-2 months 4 to 17
5 Launch and close of tender 1 month (Max) 5 to 18
6 Award of tender.
7 Negotiate sale by private treaty (if bidding falls below reserve price) 10 weeks (Max) 7.5 to 20.5
8 Apply to STB or High Court 3 – 9 months 10.5 to 29.5
9 Completion of sale 3 months 13.5 to 32.5
10 Handover of vacant possession 6 months 18.5 to 38.5

The maximum and minimum duration of the en bloc sales process as indicated in the cumulative timeline in the table is roughly between 18.5 months to 38.5 months.

The earliest any home owners can receive any en bloc sales proceeds could be around 13.5 months and the latest will be 32.5 months.

Written by Ravi Chandran

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