WHO PULL THE EN BLOC TRIGGER? THE ROLE OF OWNER-INVESTORS IN THE COLLECTIVE SALE MARKET

Abstract

Singapore has caught an en bloc frenzy over the last two years in the redevelopment market, a unique phenomenon that has recycled land and inspired urban rejuvenation. Since the Majority Consent Rule is the key prerequisite for a collective sale to go through, the parties involved in the negotiation process could possibly influence the outcome. Apart from the number of owners within a development, the profile of homeowners, namely owner-investors or owner-investors, could also have a significant influence on collective sales due to different selling behaviour and psychological factors. Therefore, this paper aims to provide an in-depth understanding on the influence of owner-investors on the likelihood of a collective sale being initiated and its success. A sample of 305 private non-landed developments is obtained from May 2016 to December 2018, 106 of which attempted en bloc sales and 199 of which have not attempted en bloc. From the full data set, a sample of 75 successful en bloc sites and 31 unsuccessful sites is gathered. A logistic regression is conducted on the samples to investigate the relationship between the percentage of owner-investors and the likelihood of a collective sale being triggered and being successful respectively. The empirical results show that a higher percentage of owner-investors within a development results in a higher likelihood of the initiation and success of a collective sale. In the light of lack of such literature, this paper serves as a pioneer study accessing the influence of owner profile on collective sales to fill in the gaps in existing literature and laid the foundation for future research.