Kai Fook Mansion, a collective sale site located at Kim Tian Road has been launched for sale through public tender by sole marketing agent, Huttons Asia Pte Ltd, with an asking price of $123 million.
Kai Fook Mansion, a 9,999 year leasehold site, sits on a total land area of 1,476.8 sqm (15,896 sqft) and is zoned for “Residential with Commercial at 1st Storey” with an allowable gross plot ratio of 3.0.
With the existing total strata area of 49,944 ft², the Kai Fook Mansion site could be developed into a 6-storey comprising 41 residential apartments with an average size of 915 ft² and approximately 12,500 ft² commercial spaces which could house a large hyper-mart, F&B or co-working spaces, subject to planning approval.
“The site offers an excellent redevelopment opportunity for developers to create a contemporary masterpiece within the nostalgic and vibrant Tiong Bahru estate” says Mr Terence Lian, Head of Investment Sales, Huttons Group.
Kai Fook Mansion is a mere 3-minute walk to Tiong Bahru Plaza and Tiong Bahru MRT station, which is a convenient location for both amenities and getting around the city.
“The area is a popular choice for both locals and expatriates given its rich cultural heritage, hipster cafes, indie bookstores and its close proximity to the city-centre” Mr Lian added.
“This highly sought-after expatriate enclave will continue to have high demand for sale and rental, as it is not only a great place to live in, relax and mingle, but also has excellent connectivity to the various parts of Singapore” says Ms Angela Lim, Deputy Head of Investment Sales, Huttons Group.
The public tender for Kai Fook Mansion closes on Wednesday, 19 May 2021 at 12 noon.
Mr Paul Ho, chief mortgage officer at iCompareLoan, said that “although the Covid-19 circuit breaker makes en bloc sales that much tougher, the site of the Kai Fook Mansion is in a good location and is hard to come by.”
The en bloc sales market has been relatively dampened by the cooling measures introduced over the past few years, but has been trying to rear its head again with the low interest rate environment. But developers are wary of end-demand and are hurt by the 5 per cent non-remittable Additional Buyers’ Stamp Duty (ABSD) on land purchase. As such, itt is expected to have an impact on their offer prices.
Before the introduction of the property cooling measures, overall private property prices rose across most market segments, with the largest price surge seen in the Core Central Region and Outside of Central Region.
As developers’ existing stock continues to diminish and supply of completed homes remain low, many projects especially those in the CCR have raised prices of their unsold units, some by even double-digits this year. Private residential market continued to gain traction with individual re-sellers have also seized the opportunity of increasing their asking prices in light of the more positive market sentiment fueled by the recent collective sales frenzy.
Mr Ho suggested that if one’s home is at risk of en bloc, the owner could consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
“With the right loan, the buyer can save thousands, if not tens of thousands of dollars,” he said. Adding, “which is why they would have to work with established mortgage brokers who can provide them free service.”
As the collective sale fever tries to make a come back, some smaller en bloc projects are getting better results and successes. 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.
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.