Selegie Centre, a prime freehold property in District 7, has been sold en bloc in its 3 attempt. Selegie Centre is located at the junction of Selegie and Mackenzie Roads and borders the central business district. The mixed development of 33 shops and 25 apartments is within walking distance of the Little India, Rochor and Dhoby Ghaut MRT stations.
Numerous feeder bus services are available near Selegie Centre. It is also a short ride to a few local and international schools, such as Singapore Management University and Chatsworth International School. Residents can walk over to the nearby shopping centres such as Peace Centre and Parklane Shopping Mall for amenities such as supermarkets, restaurants and eating establishments, and other shops.
The sole marketing agent of the collective sale, Property Link Services, said that Selegie Centre was sold at its reserve price of $120 million.
The 10-storey building has a gross floor area of about 60,000 sq ft. With a land rate of $1,942 per square foot per plot ratio (psf ppr) owners of 84 sq m size apartments in Selegie Centre will get about $1.7 million and shop owners can expect between $1 million and $12 million, depending on the unit size.
Selegie Centre’s en bloc sales committee chairman M Thomas said, “the building needs many repair works to be done and it is timely for (it) to be revamped. He added: “We believe that the redeveloped building will be a landmark for the overall outlook of the Tekka or Little India precincts. It will form an integrated resort atmosphere for visitors passing through Selegie or Serangoon and Little India.”
Property Link Services said the buyer of Selegie Centre is Peak Tower Corporation and that the buyers is backed by an Indonesian developer and industrialist. The buyer expects to build a hotel or commercial complex at the current location and hopes the relevant authorities will approve rezoning change for the property.
Paul Ho, the chief mortgage consultant at iCompareLoan, said, “in the current climate, sellers of collective sales must be persistent.” He added, ” I am glad that the owners of Selegie Centre were able to sell the property in their third attempt.”
Whatever decisions owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners. One way is to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.
As collective sale process takes 20 to 30 months to complete, during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new condominium early.
By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.
The rules for en bloc sale are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.
Many of the home owners who refinanced their home loans to fixed rate home loans or those with 2 years locked-in or 3 years locked-in period will incur full home loan redemption penalty. This penalty is usually 1.5% of the loan amount. This tends to affect those who have bought their properties in recent years as their loan size tends to be bigger and their corresponding home loan redemption penalty higher.
If one’s home is at risk of en bloc, the owner should consider a home loan where there is no locked-in penalty, but instead entails a higher housing interest rate cost. The next best option is to look for packages with a waiver of locked-in penalty due to sale of property. Such owners may contact a mortgage broker to assist them to find such packages with waiver of locked-in penalty.
In order to understand how and whether to go into an En Bloc sales and sign on the Collective Sales Agreement (CSA), the owners will need to know how long it will take you to complete the En Bloc sales in case it is successful.The maximum and minimum duration of the en bloc sales process as indicated in the cumulative timeline in the table is roughly between 18.5 months to 38.5 months. The earliest any home owners can receive any en bloc sales proceeds could be around 13.5 months and the latest will be 32.5 months.
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