Almost $1 billion of collective sales so far in 2010

Published November 4, 2010

By UMA SHANKARI

(SINGAPORE) Collective sale transactions have hit $975.6 million so far this year, according to Jones Lang LaSalle (JLL).

And residential collective sales - at $883.6 million year-to-date - account for over 90 per cent of the total.

In contrast, there was only one successful collective sale in 2009 - that of Dragon Mansion for $100.8 million.

'The rise in popularity of collective sales this year could be attributed to the improving fundamentals of the Singapore property market and the widening gap between prices of new and resale residential property,' said Stella Hoh, head of investments at JLL.

'Median prices for sales of new property averaged 48 per cent above those for resale transactions during the first three quarters of 2010. These factors seem to have encouraged owners of older properties to band together and attempt a collective sale of their estates.'

JLL's report also found that investor interest is focused on the central, city fringe and East Coast areas.

But successful collective sales have been recorded in upgrader locations such as Balestier and Toa Payoh (District 12), Geylang and Eunos (District 14), and Serangoon, Serangoon Gardens and Hougang (District 19).

In line with the increase in residential collective sales, there is also evidence of transaction values bouncing back, JLL said. The largest collective sale so far this year is that of Meng Garden, for $137 million or $1,380 per square foot per plot ratio (psf ppr).

JLL said: 'This is a significant quantum, and competitive compared with collective sales in the same vicinity that were transacted in the third quarter of 2007.'

Although mixed-use collective sale transaction value comprises just 5 per cent of the total amount, JLL's head of commercial investments Quek Soh Hoon said large freehold sites are still generating interest among investors.

Source: http://www.businesstimes.com.sg