AMALGAMATION ON EN BLOC SALES SITES

Abstract

The passing of the amendment in the Land Titles (Strata) Act on 11 October 1999 opened the "floodgates" to en bloc sales. In 1999, out of the $2 billion worth of residential properties picked up mainly in the prime 9, 10 and 11 districts, the "piggy¬ back" tactic used by developers to acquire all these en bloc sales sites was evident. Amalgamations of en bloc sites seem to be the approach developers are adopting. The study aims to explore the attractiveness of the "piggy-back" approach and how it has become a "buying strategy" among en bloc sites buyers. In addition, the study hopes to identify the big players in the amalgamation of en bloc sales sites. The research methodology is through the analysis of successful en bloc sales transactions reported in the Singapore Straits Times and Business Times. Unpublicised en bloc transactions are excluded. Through the data analysis, it was noted that the highest volume of amalgamation of en bloc sales sites occurred in Year 1999, in line with positive sentiments with the passing of the Land Titles (Strata) Amendment Act in October 1999. Most of the amalgamated en bloc sites are in prime districts 9, 10 and 11. City Development Limited (CDL) emerged as the overall biggest buyer in the en bloc sales market but it lost out to DBS Land in terms of amalgamating en bloc sales sites. More and more developers are seeking for amalgamated en bloc sales sites as a bigger and regular-shaped site enables them the flexibility of development. Furthermore there is the savings due to the economies of scale in construction. The outlook for the amalgamation of en bloc sales sites is very positive, as this is the opportunity for developer to landbank on freehold land in land scarce Singapore.