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Senior citizens look forward to peaceful retirement, not financial gain from en-bloc sales

Letter from Henry Lim
 
Handsome profits are the chief reason for en-bloc property sales having gained so much popularity.

In the early days, en-bloc sales were confined mainly to old developments, with developers also taking the opportunity to build up their land banks. Over recent years, however, the main motivation has become the huge monetary gain from such sales, regardless of the age of the development.

We have also seen attempts by homeowners going to court to stop such sales for personal reasons but without success, the argument being that the current law does not allow for personal reasons to override majority concerns.

The en bloc fever has, unfortunately, caused some uneasiness among senior citizens who have hoped to live out their retirement years in their present homes and who view relocation as unnecessary and disturbing. Some senior citizens have downgraded to small private apartments for practical reasons. It is thus very upsetting if they find themselves having to relocate years later.

My wife and I are among these. We recently moved to a small but comfortable apartment, hoping to live out our retirement without having to move again. Alas, we have just heard that our development is considering an en-bloc sale. We are very upset and anxious about what the future holds for us. I am sure many other senior citizens also harbour such anxieties, and look forward not to financial gain but to a peaceful retirement.

In this respect, the Housing and Development Board (HDB) has taken the lead with its Selective Redevelopment Scheme (SERS) whereby new apartments are built to relocate affected HDB owners before any redevelopment starts. It has made the relocation process more acceptable and convenient, especially to older folks.

For private developments, I would like to suggest that a time bar be imposed before a development can be sold en bloc. Taking into consideration the needs of senior citizens and need for re-development of old properties, it would be reasonable to allow en-bloc sale if the building is more than 30 years old from date of completion.

This advance notice would allow all owners to plan for their future accommodation, whether they intend to buy for short, medium or long term. If a person is over 50 and looking for a home to stay in till his last days, he should then consider buying a new property which will at least give some certainty that en-bloc sale will not take place for the next 30 years.

I strongly feel that the authorities should review current rules governing en-bloc sale, to give due weightage to the concerns of senior citizens, while at the same time not stifle future redevelopment.

Source : Today - 28 Feb 2007

MEDIA group Singapore Press Holdings (SPH) said yesterday that directors and related parties have bought 10 apartments at its Sky@eleven condominium for a total of $24.9 million.

The company said in a filing to the Singapore Exchange that its board has approved the proposed sale of the 10 units to ‘interested parties’ related to four directors - chairman Tony Tan, Lee Ek Tieng, Sum Soon Lim and Willie Cheng Jue Hiang. No discounts were given, SPH said.

Dr Tan’s son and daughter-in-law bought a unit for $1.9 million. And Bee Kiang Pte Ltd, a company in which Dr Tan and his immediate family have an interest of at least 30 per cent, bought one unit for $3.1 million and another for $2.8 million.

Mr Lee and members of his family bought four units worth a total of $10.4 million, at individual prices ranging from $2.2 million to $3 million. An apartment bought by Mr Lee and his wife cost $3 million.

Mr Sum and his family bought two units worth $4.5 million. An apartment bought by Mr Sum and his wife cost $2.2 million.

Mr Cheng and his wife bought a unit for $2.3 million.

SPH soft-launched the 273-unit freehold Sky@eleven condo on Jan 28. It said later that all units in the four-tower luxury project at Thomson were snapped up within 30 hours. The average selling price was $975 per square foot and the highest recorded price $1,200 psf.

Source : Business Times - 28 Feb 2007

Tange design yet to get official approval: sources

Tenants at Specialists’ Shopping Centre and Hotel Phoenix are getting ready to move out around the middle of this year, but it remains to be seen how soon owner OCBC will start redeveloping the site, market watchers say.

For one thing, BT understands that Tange Associates’ proposed 20-storey design for a new hotel and mall project on the existing Specialists’ Centre/Hotel Phoenix freehold site is still pending approval from the Orchard Road Development Commission (Ordec).

The inter-government agency group’s nod is required as the proposed scheme exceeds both the 16-storey height limit and the maximum plot ratio allowed for the site.

In addition, amended banking regulations effectively bar OCBC from redeveloping Specialists’ Centre/Hotel Phoenix, say market watchers. The Banking (Amendment) Regulations 2004, which cover prescribed property-related businesses, allow property enhancement works in relation to a building which do not amount to demolition or reconstruction of the building, and which do not vary the gross floor area of the building by more than 20 per cent.

‘Clearly, any proposal to redevelop Specialists’ Centre involves tearing down the existing building and redeveloping the site, let alone the fact that the Tange Associates’ design involves a plot ratio said to be more than 20 per cent higher than the 6.62 based on Specialists’ Centre/Hotel Phoenix’s existing gross floor area,’ said a market watcher.

‘On the other hand, if OCBC were to merely refurbish or retrofit the property, that would be fine, going by the banking regulations. But this would not maximise efficiency given that the building is over 30 years old and its layout and efficiency (ratio of net lettable area to gross floor area) are dated,’ he added. An industry player suggested that OCBC should consider teaming up with Far East Organization and Australia’s Lend Lease group, which are developing separate mall projects on each side of Specialists’ Centre.

OCBC has already taken a 10 per cent stake in the Far East project. Perhaps the bank could consider selling Far East a lease for the Specialists’ Centre/Hotel Phoenix site, and Far East could then plough money for its redevelopment and even give OCBC a cut of the yield from managing the asset later, some analysts speculate.

‘That way, OCBC can still continue to own the freehold land on which the redevelopment takes place if there are quarters in the bank who feel the bank should not let go of such a prime property,’ added the industry player.

Another observer said that it also makes sense for OCBC to invite Lend Lease to participate in the redevelopment project - after all, they are famous for both project management and retail management. ‘It would be in the best interests of all three stakeholders - Far East, OCBC and Lend Lease - to work hand-in-glove, ensuring connectivity for the three projects and turning them into a strong enough magnet to rival CapitaLand and Sun Hung Kai’s Orchard Turn mall one MRT stop away,’ he added.

Lend Lease’s mall could be about five to six storeys above ground and possibly include three to four basement levels with about 300,000 square feet of net lettable area in total. Far East’s Orchard Central mall, slated to be ready in late 2008, will be 10 storeys high with two basement levels, adding up to about 390,000 sq ft of gross floor area.

When contacted yesterday, OCBC reiterated that it intends to hold on to the Specialists’ Centre/Hotel Phoenix property for long-term investment, but declined to elaborate further.

Source : Business Times - 28 Feb 2007

10,781 sq m area likely to draw hotel, office developers

The Urban Redevelopment Authority has launched a site at Belilios Road/Klang Lane in Little India for sale by public tender.

Designated a white site, the possible uses of the site, which has a plot ratio of 3.5 and permissible gross floor area of 10,781 square metres, include hotel, retail, dining, entertainment, office and residential.

This site, next to a Hindu temple on Belilios Road, is also one of the five sites that were transferred from the Reserve List of the Government Land Sales Programme to the Confirmed List for the H107.

Savills Singapore director (marketing and business development) Ku Swee Yong notes that the site does not have significant street frontage facing Serangoon Road. Its irregular shape could also prove a challenge for developers.

Mr Ku believes an office block with a retail component could be feasible but adds that a hotel development is more likely to benefit from the tourism appeal of the area.

As such, Mr Ku believes that a 180- to 200-room hotel with a retail or F&B component would be an attractive proposition for a developer.

Based on a cost of about $250,000 per room for a three- to four-star hotel, and additional costs for retail/F&B component, Mr Ku believes the site could draw bids of around $50 million or between $400-$450 per square feet per plot ratio (psf ppr).

Knight Frank director (consultancy and research) Nicholas Mak also believes developers will more likely propose a hotel development with a commercial component for the site.

He also noted the proximity to the temple could make the site unsuitable for a residential development.

Mr Mak expects developers will bid between $350-$450 psf ppr and added that the site is ‘likely to attract a few bids, and mostly from smaller developers and possible some interest from overseas Indian property companies’.

Apart from the Belilios Road/Klang Lane site, other sites on the Confirmed List that will be launched include a residential site at Choa Chu Kang Road/Woodlands Road, a commercial site at Tampines Grande and a sports and recreation site at Fairy Point Hill.

Source : Business Times - 28 Feb 2007

A SECOND batch of two-room flats derived from breaking up bigger units has been put up for sale, along with about 1,000 bigger flats, in HDB’s latest balloting exercise.

The 84 two-room flats in Sengkang, converted from unsold executive flats there, cost between $59,000 and $76,000 each.

The return of these smaller units, following more than 20 years during which HDB focused on building and selling bigger flats, is part of the effort to put housing within reach of the less well-off.

Families wanting to buy these units must not earn more than $2,000 a month.

To come up with these two-room flats, 84 executive flats in Anchorvale Link were each carved into two units - a two-room one and a three-room one. They are expected to be ready by the middle of this year.

The first batch of 100 such converted flats was offered in Jurong West last August. More than 200 people applied for them.

The latest balloting exercise announced yesterday also unveiled three-, four- and five-room units for sale in Bedok, Bukit Merah and Clementi.

Priced between $167,000 and $411,000, they are surplus flats from recent Selective En-bloc Redevelopment Scheme exercises, in which old flats are torn down to make way for new ones in the neighbourhood.

Households eyeing these flats cannot earn more than $8,000 a month. The three-room units, however, have a qualifying income ceiling of $3,000.

Low-income households buying homes for the first time can also apply for a housing grant of up to $20,000.

Applications are open until March 19. Shortlisted applicants can expect to book their flats in June or July.

Source : Straits Times - 28 Feb 2007