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En bloc hopefuls march ahead with tenders despite new curbs

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Despite the increased ABSD rates for developers, tenders for properties such as Lakepoint Condominium, Dublin Lodge, Sixth Avenue Centre, Baode Building, and Hillview Terrace will continue.

Projects with ongoing collective sale tender exercise continue as planned even as analysts expect the new property cooling measures to take the wind out of the sails of the residential en bloc sale market, reported Channel News Asia (CNA).

This comes as the latest measures include a heftier 35% Additional Buyers’ Stamp Duty (ABSD) for developers, in case they fail to complete and sell all units within their projects in five years.

Marketing agents told CNA that their clients want their current tender exercises to proceed without any changes.

PropNex Realty said the collective sale tender for Lakepoint Condominium, will close on 22 December as planned.

Cushman & Wakefield revealed that the ongoing tenders for the freehold landed development Dublin Lodge, as well as mixed-use site Sixth Avenue Centre, will also continue. They are set to close on 4 January and 6 January, respectively.

“In general, the committees we are working with were surprised by this new set of cooling measures, despite the fact that the grim prospect has been hanging over everyone’s head for the last month or so,” the firm told CNA.

“The cooling measures were somewhat expected; it was just a matter of how severe and when they would be implemented.”

However, it pointed that the current asking prices of the projects – at $65 million for Dublin Lodge and $86 million for Sixth Avenue Centre – are “very reasonable”.

“Our current asking prices are still pretty much at pre-COVID market levels as these were fixed in 2019,” said Cushman & Wakefield, adding that they “have not factored in the recent market run-up as yet”.

Colliers Singapore said the tenders for Baode Building as well as the site at Hillview Terrace will continue on 18 January and 20 January, respectively. It added that “decisions will be made based on the submissions”.

The tender for The Beaumont as well as Tanglin Shopping Centre will also close on 20 January and 22 February, respectively, as planned, said Savills Singapore.

With the new cooling measures, Professor Sing Tien Foo from the National University of Singapore’s (NUS) Institute of Real Estate and Urban Studies expects developers to be pickier on their residential land purchases.

“The bigger plots will get more and more difficult (to work with) because of the 35 per cent ABSD. To sell big projects – above 500 units – is quite challenging,” he told CNA previously.

Wong Xian Yang, Research Head at Cushman & Wakefield, noted that development risks have also increased, citing factors such as ongoing construction uncertainties.

But given the “very low levels” of unsold inventory of residential properties, developers are anticipated to continue with land acquisitions in both private and public domains, albeit “with a more cautious behaviour”.

Wong Siew Ying, Head of Research and Content at PropNex, believes the impact on the collective sale market may be “uneven”, with bigger sites and those within the Core Central Region (CCR) expected to face more challenges.

Nonetheless, she expects en bloc sites in the Outside Central Region (OCR) to “still find buyers provided the owners are realistic on pricing”.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: [email protected].

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