Collective sales giving rise to more millionaires

Collective sales giving rise to more millionaires
While Sophia Court owners will each receive $856,000 to $2.65m, Bellerive owners are set to get $1m to $1.5m


LATE last week, two collective sales sent more home owners well on their way to becoming instant millionaires.

The 188-unit Sophia Court in Adis Road was sold to GuocoLand for $230 million while the 31-unit Bellerive off Bukit Timah Road was sold for $37.2 million.

Sophia Court owners will each get a figure of somewhere between $856,000 and $2.65 million while Bellerive owners will each get $1 million to $1.5 million.

These are just the latest in a long string of collective sales this year.

The latest deals take this year's collective sales record to a whopping $7.6 billion in total, dramatically higher than last year's nearly $2 billion, according to CB Richard Ellis.

And more are set to come. Just last week, Credo Real Estate launched two collective sale sites.

Newcomer Newman & Goh Property Consultants said it already has eight projects worth $1.35 billion to $1.5 billion lined up for launch next year.

It entered the market only last year, when it sold $600 million worth of sites.

Said its head of investment sales Jeffrey Goh: 'Interest shown by developers is still very lucid.'

And some developers are tying up with foreign funds to acquire sites.

Newman had sold Bellerive to Sing Holdings and Forum Asian Realty Income II. The two also tied up early this month to buy Finland Gardens for $49.5 million.

'A lot of foreign money is coming in,' said another Newman executive. 'We think there will still be a good one or two years ahead.'

Ms Tang Wei Leng of DTZ Debenham Tie Leung said there is a chance that the value of next year's collective sales will be about the same as this year's.

But the volume is likely to be smaller, she said.

Indeed, next year's sales could be lower, said CB Richard Ellis' executive director, Mr Jeremy Lake.

Demand remains strong but supply will be weaker as choice sites have been bought.

'It is getting more difficult to get the owners to agree in view of the market buoyancy and the higher cost of a replacement property,' Mr Lake said.

Property consultants said that demand remains selective despite record sales.

Nevertheless, even if next year's sales are lower, they are still set to be much higher than the previous record registered last year.

And as always, owners' expectations may make or break a sale, as they always move ahead of the market, said a market watcher.

For now, market momentum looks set to flow through to the first half of next year. Second-half performance would depend a lot on the response to developers' first-half launches, she added.

But there will be no lack of supply of new apartments. A recent Macquarie Research report estimated that developers' new projects from collective sale sites bought in the past two years total 11,489 units.