Amended laws spur collective sale hopes, even as developers remain choosy

Six weeks after Parliament passed a Bill on Sept 8 lowering the consent threshold for collective sales of older developments, at least 19 strata developments are exploring or preparing for en bloc sales.

Many are still in the early stages of the collective sale process, notes JLL. They range from those assessing the feasibility of a collective sale to those that have already appointed marketing agents.

These include privatised HUDC estates such as Braddell View and Lakeview Estate, commercial developments including The Arcade and Manhattan House, and mixed-use projects such as Upper Serangoon Shopping Centre.

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However, the growing number of collective sale hopefuls has yet to translate into more deals. Whether it will “ultimately depends on realistic pricing from owners”, says Nicholas Ng, head of land and collective sales at JLL Singapore.

“From experience, large projects embarking on collective sales for the first time rarely succeed, as owners have not yet experienced failure and often maintain unrealistic price expectations,” he adds.

Developers remain selective, with only three significant collective sales recorded this year: Tan Boon Liat Building, which Kingsford Group agreed to purchase for $950 million in July; Loyang Valley, acquired by SingHaiyi Group for $880 million in April; and the rear block of The Centrepoint, purchased by Frasers Property for $391.9 million in February.

Among those preparing for another attempt is International Plaza, the 50-storey Tanjong Pagar landmark whose owners have formed a new collective sale committee (CSC). It will be the development’s second attempt, following an unsuccessful launch at $2.7 billion in 2021 — then the highest asking price for an en bloc sale.

Completed 50 years ago, International Plaza occupies a 75,089 sq ft site with 43 years remaining on its 99-year lease.

The new CSC is chaired by Gerald Cheong, executive director of Tian Teck Investment Holdings, which owns a substantial stake in International Plaza. Kevin Liang, who chaired the previous CSC, returns as secretary.

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The committee has yet to set the reserve price, as it is “in the midst of appointing a marketing agent and a lawyer”, Liang says.

More sites, few takers

Tenders for 10 collective sale sites have recently closed, or are scheduled to close in October, with more to follow in November.

Several have attracted enquiries but no firm bids. For example, People’s Park Centre in Chinatown, launched for the third time at $1.48 billion, received no bids when its tender closed on Sept 16. The development is now in a 10-week private treaty period ending Nov 24.

“While there were no bids at the close of the tender, there were some enquiries,” says Sunny Wong, division director at ERA Realty, which is handling the sale.

City Plaza, a freehold mixed-use development in Paya Lebar Central, is also in private treaty after its third collective sale tender closed on Oct 13 without a bid. The guide price was $970 million.

Terence Lian, head of investment sales at Huttons Asia, says expressions of interest have been received.

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Two residential developments marketed by JLL — Lakeside Towers in Jurong West and Gilstead Court in Newton — have likewise entered private treaty after their tenders closed on Oct 1 and Oct 13, respectively.

The 144-unit Lakeside Towers, on its third attempt, had a reserve price of $350 million, or $1,277 psf per plot ratio (ppr). The development has 48 years remaining on its lease.

Gilstead Court, a 48-unit freehold condo in prime District 11, is on its fourth attempt since 2008, with a reserve price of $198 million, or $1,874 psf ppr.

“Both Lakeside Towers and Gilstead Court attracted viewing activity during the marketing phase,” says Ng. Their private treaty periods end around Dec 9 and Dec 21, respectively.

High Point, a 59-unit freehold condo on Mount Elizabeth, is also in its private treaty period, which ends on Dec 21, after its sixth collective sale tender by ETC (a member of Realion Group) closed on Oct 12. The development had a guide price of $580 million.

Meanwhile, two developments relaunched for collective sale this month have tenders closing in November.

Balestier Regency, a 72-unit freehold development on Jalan Ampas, is making its fifth attempt at an unchanged guide price of $255 million. Its tender closes on Nov 12.

Beauty World Plaza, a 999-year leasehold mixed-use development next to Beauty World MRT Station, is on its third attempt at $165 million, with the tender closing on Nov 19.

Smaller sites, alternative uses widen buyer pool

While several larger collective sale sites have struggled to secure buyers, some smaller properties offering redevelopment flexibility have attracted stronger interest.

Pek Chuan Building on Lavender Street drew three bids when its third collective sale tender closed on Oct 7. GH15 Ventures, an investment vehicle of GH15 Investments, a company registered to operate hostels and dormitories, won with a bid of $80.68 million.

The successful bid was 4.8% above the $77 million asking price. It also exceeded the $80 million sought in the building’s two earlier attempts, in October 2025 and March 2026.

Terry Wong of Colliers Singapore represented the bidder, while Dillon Loi of Mount Everest Properties marketed the property.

The four-storey building can be redeveloped up to 12 storeys, while the buyer may also apply for a change of use to a hotel or mixed-use development. The property has about 51 years remaining on its lease.

Redevelopment flexibility is also generating interest in two freehold sites marketed by Knight Frank Singapore, whose tenders close on Oct 23.

One is Trendale Tower at 79 Cairnhill Road, which is on its fourth collective sale attempt.

Completed in 1982, the 20-storey freehold development comprises just 18 apartments on a 21,709 sq ft site. Its guide price of $168 million translates to $2,248 psf ppr, including the 7% bonus gross floor area (GFA) for balconies, according to Knight Frank.

The site could be redeveloped into a boutique luxury condo or a long-stay serviced apartment project. URA has indicated support for Serviced Apartment 2 (SA2) use under an outline planning permission application, subject to approvals.

Melvin Chay, interim head of capital markets at Knight Frank Singapore, says interest has been strong. “We have received a healthy mix of enquiries from developers exploring conventional residential redevelopment for sale, as well as investors with a longer-term investment horizon evaluating the potential for SA2 use for recurring income,” he says.

The two strategies have widened the pool of potential buyers beyond traditional residential developers, he adds.

Chay says developers have also identified a shortage of large-format apartments, which are in demand.

The other site, 154 Kampong Ampat, is a seven-storey industrial building in Tai Seng-MacPherson with a guide price of $105 million, or about $913 psf ppr.

Its existing GFA of 114,969 sq ft exceeds what its current zoning permits, while authorities have indicated support for workers’ dormitory use. The property has drawn enquiries from developers, dormitory investors and owner-occupiers, Knight Frank says.

In March, Soon Hock Enterprise, a developer and investor specialising in industrial assets, bought another industrial property, Kewalram House, for $120.51 million — $510,000 above its reserve price.

The pricing gap

Despite renewed interest in collective sales, developers remain cautious about acquiring en bloc sites, especially when Government Land Sale (GLS) sites offer a simpler alternative.

JLL’s Ng says developers have become “very selective”, partly because collective sale sites generally take longer to secure than GLS sites. “Many GLS sites benefit from proximity to MRT stations, which is a significant advantage given Singapore’s growing rail network connectivity,” he adds.

For owners, however, the motivation to pursue a collective sale rests largely on the premium they can secure over the resale value of their individual properties. Lee Liat Yeang, Dentons Rodyk senior partner of corporate real estate group, says owners typically expect a “healthy premium”, particularly as those selling residential properties must also find replacement homes.

“This issue is particularly difficult if the owner is not a Singapore citizen or is a Singapore citizen with more than one residential property, given the potential additional buyer’s stamp duty (ABSD) exposure if they buy again,” adds Lee.

Over the past two decades, the premium from a collective sale has narrowed significantly. Ian Loh, managing director of Quinvest Chambers International Property Consultants, estimates the premium at 20% to 40% today, compared with 40% to 60% during the 2017 to 1H2018 en bloc wave, and 60% to 100% at the 2005–2006 peak.

Meanwhile, GLS land prices have continued to set new benchmarks. A site on Peck Hay Road fetched $1,865 psf ppr, a post-2018 high for the Core Central Region, while sites at Lorong Puntong and New Upper Changi Road set benchmarks of $1,612 and $1,537 psf ppr in the city fringe and suburbs respectively.

However, rising GLS prices are unlikely to drive developers towards collective sale sites, says Norman Ho, senior partner at Rajah & Tann Singapore.

En bloc acquisitions carry greater uncertainty, Ho continues, including potential objections from minority owners to the Strata Titles Board and delayed vacant possession, with owners generally allowed to remain up to six months after the sale is completed. GLS sites, by contrast, can be developed once they are awarded.

Higher GLS prices also push up the cost of replacement homes, making it harder for owners to agree on a reserve price, Ho notes.

He does not expect another wave of collective sales like the one nearly a decade ago. “A replacement home is also pricier, and the premium is much lower than before, so there is less incentive for them to sell and take the trouble to move out,” he says.

Owners who bought their units recently may also be reluctant to sell if doing so would trigger the seller’s stamp duty within the four-year holding period, JLL’s Ng adds.

Will lower consent thresholds make a difference?

The amendments to the Land Titles (Strata) Act are intended to make it easier for older developments to secure the majority consent needed for a collective sale.

Once the changes take effect, the consent threshold will fall from 80% to 70% for developments aged 40 to 59 years, and to 65% for those aged 60 years and above.

This could give some developments that previously struggled to secure sufficient consent another opportunity.

At Lagoon View, a 480-unit privatised HUDC estate in Marine Parade, the CSC had secured only 61% consent by end-August. The neighbouring 516-unit Laguna Park also failed to reach the 80% threshold in a recent attempt.

However, the amendments come with another significant change: CSCs will have just six months, instead of 12, to gather the required signatures. The waiting period after a failed collective sale attempt will also be extended from two years to three.

“Sometimes, owners take their own sweet time just because they have 12 months,” says Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore.

“Now they will only have six months, so it will focus their attention, which is actually a good thing.”

However, Lake cautions that developments with 600 or more owners may struggle to secure the necessary consent within the shorter timeframe.

International Plaza is one such development. With 962 strata units comprising shops, offices and homes, securing 70% consent within six months could prove challenging. “It’s a large-scale mixed-use development,” says Liang, the CSC secretary.

Other large mixed-use developments are also looking to revive their collective sale ambitions.

Orchard Towers, launched at $1.6 billion in 2022, failed to secure a buyer, and a subsequent 2023 attempt fell short of the 80% consent threshold. Its owners are said to be restarting the process.

The owners of Far East Shopping Centre on Orchard Road are also said to be in the early stages of another collective sale attempt, following the collapse of a $908 million deal in 2024.

While lower consent thresholds may encourage more developments to pursue collective sales, securing a buyer remains a different challenge. “With ABSD, GFA harmonisation, rising redevelopment costs and other regulatory considerations, developers face tighter margins and greater financial risks,” says Quinvest’s Loh.

“Ultimately, easing the collective sale process does not necessarily translate into stronger developer demand or more successful en bloc transactions,” he adds.