In Singapore, when the topic of an en bloc sale is brought up, it is inevitably accompanied by discussions of how much money can be made from the deal. An en bloc sale in Singapore is often likened to a windfall, as the financial compensation for homeowners can be substantial.
It’s no surprise, then, that potential en bloc projects are a hot topic among Singaporeans. The question on most people’s minds is likely, which projects are next?
But first, what exactly is an en bloc sale, and why is it so lucrative for those fortunate enough to be part of one?
Collective Sales in Singapore: What Are They?
The term “en bloc” (also known as a collective sale) originates from French, meaning “all at once, in a block,” “as a whole,” or “all together.” In Singapore, the term refers to the homeowners of an older development agreeing to sell their homes simultaneously to a single buyer. It is also known as a collective sale by some homeowners in Singapore.
Typically, this buyer is a real estate developer purchasing a private residential project.
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Collective Sale: How Does It Work?
A collective sale differs from a regular real estate transaction in scale. In a regular transaction, you only sell one property to another person at market price. In a collective sale in Singapore, the entire private residential project is sold with the consent of a vast majority of the owners, and often at a price higher than the resale market value.
| Who buys collective sale projects? | Real estate developers or the government |
| Sale process duration | Can take up to two years |
| What is being sold in a collective sale? | Every unit in the condominium and the land |
| How much can it be sold for? | The collective sale committee typically sets a reserve price that is higher than the current market value.
The buyer (i.e., the real estate developer or the government) will try to match the reserve price or negotiate with the committee. |
| When is a collective sale transaction confirmed? | When the collective sale committee gets a consensus from the owners to sell.
For condominiums less than 10 years old since obtaining their Temporary Occupation Permit (TOP), at least 90% of the owners must agree to the sale. For condominiums more than 10 years old since obtaining their TOP, more than 80% of the owners must agree to the sale. |
The sale process can also take a considerable amount of time, often up to two years to complete and receive the sale proceeds.
Developers tend to purchase these properties at a premium, so if you bought your property a while ago at a lower price, you are likely to make a handsome profit.
Condos with the Most Collective Sale Potential in 2022
| Property | District | Number of Units | TOP Year |
| Braddell View | 20 / Ang Mo Kio, Bishan, Thomson | 438 | 1981 (40 years) |
| Emerald Park | 3 / Alexandra, Commonwealth | 280 | 1993 (28 years) |
| Hillcrest Arcadia | 11 / Novena, Newton | 272 | 1980 (41 years) |
| Peace Mansions | 9 / Orchard Road, River Valley | 42 | 1976 (45 years) |
1. Braddell View (Very High Potential for Collective Sale in 2022)
Braddell View, formerly a HUDC (Housing and Urban Development Company) estate, was privatized in 2017. The development was put up for collective sale on March 27, 2019, at a high price of S$2.08 billion, but the tender closed in May without any bids. On August 13, it was relaunched for tender at the same price but also received no offers.
Many aspects of Braddell View are attractive to developers. Braddell View covers an area of 1.1 million square feet and is centrally located, close to Braddell and Caldecott MRT stations. There are also coffee shops, wet markets, and several schools nearby.
If the collective sale is successful, each owner will receive between S$2.04 million and S$4.03 million, while shop owners will receive about S$529,000 to S$1.2 million.
However, it is uncertain whether developers are willing to pay such a large sum, especially considering property cooling measures like the Additional Buyer’s Stamp Duty (ABSD), which means they would incur significant taxes.
2. Emerald Park (High Potential for Collective Sale in 2022)
Emerald Park is a condominium along Indus Road, about a 10-minute walk from Tiong Bahru MRT station.
Given its prime location, many developers might be interested in this condominium. Emerald Park is close to central Singapore, including Orchard Road and the business district. Rumors about a potential en bloc sale of Emerald Park have been circulating for a long time.
3. Hillcrest Arcadia (High Potential for Collective Sale in 2022)
Hillcrest Arcadia is located on Arcadia Road in Bukit Timah, one of Singapore’s heritage roads. In 2011, residents attempted to top up the remaining 66-year lease back to 99 years to preserve the aging estate. However, their application was rejected by the Singapore Land Authority (SLA).
Similar to Emerald Park, the appeal of Hillcrest Arcadia lies in its proximity to Singapore’s central districts. There are also many restaurants, renowned schools, and shopping malls nearby.
4. Peace Mansions (Very High Potential for Collective Sale in 2022)
Peace Mansions is part of the mixed-development Peace Centre, both occupying a substantial area of 76,617 square feet. Located in a prime area, Peace Centre is situated at 1 Sophia Road, right next to the Civic District. Peace Mansions is within 600 meters of four MRT stations, accessible via the Circle, Downtown, North East, and North-South Lines.
Peace Mansions has been put up for collective sale several times, but previous attempts failed due to insufficient owner consent. However, a successful collective sale is still possible in the coming years.
Why Are Collective Sale Prices So High in Singapore?
Developers are not opposed to paying these astronomical amounts because they believe they can make a substantial profit from a collective sale.
For example, if you live in an old property with low-rise buildings spaced far apart, a developer can buy the land, demolish all the blocks, and build 30-story towers in their place. They can then sell each unit in these towers for a price much higher than the cost of purchasing the land.
Since a collective sale requires a majority of owners to agree to sell their homes, developers must convince them that it is worth giving up their property and moving elsewhere. They do this by offering a large sum of money, hoping that the owners will accept the offer.
How Do Property Cooling Measures Affect Collective Sales?
Since the government started implementing property cooling measures like the Additional Buyer’s Stamp Duty (ABSD), overall property prices in Singapore have begun to slow down. Developers are now required to pay a 30% ABSD, and considering that collective sale transactions can exceed S$1 billion, the tax amount can be enormous.
The table below shows the trend of increasing ABSD for property developers in recent years:
| Period | ABSD Rate for Purchase of Any Residential Property |
| December 8, 2011 to January 11, 2013 | 10% |
| January 12, 2013 to July 5, 2018 | 15% |
| From July 6, 2018 | 25%, plus an additional 5% for housing developers |
How to Identify Collective Sale Potential
Although the chances of your home going through a collective sale may not be high, you can still be hopeful! Here are some signs that your property might have potential.
1. Significant Rise in Land and Property Values in Your Area
If you’ve noticed a sharp increase in land and property prices around you, this is a potential sign. If your neighborhood is undergoing significant development, such as the construction of a new MRT station or a major transformation, you might benefit from a collective sale.
Location is also important. More central areas and areas with good public transport connections have a higher chance of seeing more collective sales.
2. Plot Ratio: Inefficient Land Use
It’s no surprise that the size of HDB flats and condominiums has been steadily shrinking over the years, while the height of each building has been increasing. This makes more economic sense for developers, as they can earn more profit per square meter of land by building units this way.
This means that older buildings or condominiums that do not fully utilize their land area are attractive candidates for collective sales, as they can be demolished and turned into denser residential developments. If you live in an 8-story condominium block where multiple 30-story condominium blocks could be built, it’s an enticing investment for real estate developers.
3. Land Tenure: The Older Your Property, the Better the Chance
While most buyers tend to chase newer, shinier developments, they often forget that older homes also have the potential to offer great value. Developers tend to buy old properties and redevelop them for two main reasons:
- The value per square meter of land is cheaper, and
- Owners of older homes are often more agreeable to a sale (for projects over 10 years old, developers must get consent from at least 80% of owners; for projects under 10 years old, at least 90% consent is required).
If you are one of those who opted for an older private residential project, the good news is that your property has a greater chance of a collective sale.
4. The Real Estate Market is in Good Shape
Collective sales in Singapore involve large sums of money, so developers will only proceed if they believe they can profit from buying and redeveloping the land. The market’s performance will partly determine how frequently developers bid for new properties and how much they offer.
If the real estate market is in good condition and you live in a property that meets the previously mentioned criteria, there’s a chance your property might undergo a collective sale at some point in the future!
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