View of HDB flats in the Ghim Moh area.
Despite its cumbersome and protracted process, the en bloc fever has started to catch on among foreign developers – especially those from China – signalling a paradigm shift, reported Business Times.
JLL regional director of investments Tan Hong Boon noted that en bloc sites were hardly considered by developers before 2016 since more sites were available under the government land sales (GLS) programme than in the collective sale market.
But as more attractive en bloc sites are offered in the market on the back of the limited supply of GLS sites, more developers are now turning to the en bloc market. With this, increased enquiries regarding the collective sale process have since been observed among foreign players.
A corporate lawyer revealed that Chinese developers may have even surpassed a mental hurdle towards the collective sale concept, which is uncommon in China or Hong Kong.
This is evidenced by the fact that several Chinese firms have already snapped en bloc sites. Just this month, Kingsford Hurray Development acquired Normanton Park for $830.1 million, while SingHaiyi Properties and Huajiang International Corporation acquired freehold condominium Sun Rosier for $271 million. Qingjian Realty, on the other hand, purchased Shunfu Ville for $638 million in May last year.
A buyer said to be connected to the Zhao family from China also bought a freehold industrial complex Citimac in July.
Other Chinese firms believed to be scouring for deals include Hao Yuan Investment, China Construction and Nanshan Group. MCC Land has also expressed its interest for en bloc sites.
“We have been closely observing the recent wave of en-bloc activities and will be keen to participate in a tender if an opportunity arises,” said MCC Land CEO Tan Zhiyong.
However, he remains cautious of the developers’ over-exuberant bids.
“The current residential property market seems to be stabilising and recent new launches have also been well received. However, with a likely rise in the supply of new projects coming into the market in the next couple of years arising from these en-bloc activities, how the future market will react to home prices that may rise in tandem with tender prices remains to be seen.”
credits to propertyguru