ATTRACTIVENESS OF COLLECTIVE SALES

Abstract

Collective Sale is a new marketing concept in the Singapore property market that has received much attention from developers and owners alike in the past year. It often connotes a sudden windfall for the participating owners. The objective of this dissertation is to analyse this new marketing concept and understand some of the factors that have motivated owners and developers to undertake such transactions. Collective Sales is primarily a result of demand and supply. To attract all the owners of an estate to sell their properties collectively, the most motivating factor is to pay a premium over the market price to entice them. But for a developer to be able to pay such premium, the land must have a redevelopment potential that will justify this additional sum. Redevelopment potential may arise from many situations. An example is the release oi the Development Guide Plans where owners have benefited from an 'up-zoning1 of their site as the Urban Redevelopment Authority intensifies the use of land in selected areas to maximise the usage of land in Singapore. This will usually lead to an increment in the value of the land, and thus justifying the cost of redevelopment. Collective sale provides an opportunity for the developers to purchase prime land for redevelopment in established residential districts with relative ease. For the owners, collective sale is one marketing tool that will reap in optimal returns.