Tan Boon Liat S$950 Million Sale Signals En Bloc Recovery as Sellers Turn Realistic on Pricing

Pricing realism has become one of the most important factors driving successful collective sales, said Terence Lian, head of investment sales at Huttons. Three large successful collective sales all closed at below their initial reserve prices.

Hopefuls like Pine Grove in Ulu Pandan and People’s Park Centre, which have undergone several failed bids, also lowered their reserve prices in renewed attempts. This signals that their sellers recognise they are not only competing against other en bloc sites and the government land sales (GLS) programme, which offers developers fresh sites to tender for almost every month, but that they are also battling rising maintenance costs as their buildings age and leases decay.

Catherine He, Colliers’ head of research for Singapore, noted that Tan Boon Liat, Loyang Valley and Thomson View share three characteristics: “exceptional scale, strong locational fundamentals and reserve prices that were meaningfully re-priced”.

The Urban Redevelopment Authority’s (URA) decision to rezone the Tan Boon Liat site from the current Business 1 zoning to “residential with commercial on the first storey”, coupled with a substantial increase in plot ratio from 3.1 to 4.9, significantly enhanced the site’s redevelopment potential, Lian said.

As the land was zoned Business 1 at the point of purchase, the acquisition is not expected to incur additional buyer’s stamp duty (ABSD) for the developer. Developers acquiring land for residential use face a 40 per cent ABSD on their purchase, including a non-remittable 5 per cent.

“Without such catalysts, developers’ appetite for large collective sale sites remains selective, as the underlying constraints such as ABSD, construction costs, and the 80 per cent consent threshold, have not changed,” Colliers’ He pointed out.

Kevin Liang, former collective sale committee chair for International Plaza, said Tan Boon Liat’s success is sparking hope among large collective sale sites’ sellers. International Plaza in Tanjong Pagar will hold an extraordinary general meeting on Aug 1 to form a new collective sale committee for its second attempt, he told The Straits Times.

The 50-storey commercial and residential block’s S$2.7 billion maiden attempt closed with no bids in November 2021. One of Singapore’s biggest integrated projects built in the 1970s, International Plaza comprises 209 apartments, 559 offices, 192 strata shops, a carpark and a pool.

Apart from International Plaza, Horizon Towers in Leonie Hill and Far Horizon Gardens in Ang Mo Kio are also restarting their collective sale processes after previous failed attempts. Whether the fledgling momentum building in the collective sale market can continue will depend on further equilibrium being struck between sellers and developers.