"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
Drop Down MenusCSS Drop Down MenuPure CSS Dropdown Menu
There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

A case for 1-for-1 exchange

There should be a provision for a 1-for-1 exchange as an added alternative to cash compensation as is the case now; it would indeed defray a lot of aggravation, heartache and anxiety if an en bloc sale offered two choices instead of a wholly inadequate one.  It's not acceptable that downgrading is considered a viable option. It is not acceptable that giving up our 'old' homes means moving into equally old or even older properties.
A 1-for-1 is an attractive alternative.   Owners can form a 1-for-1 Group and insist on it being an alternative. They can, and should, engage their own lawyer to look after their interests  on this matter.  It would also require a lot of work on the part of the SC, but the next SC is NOT going to have it easy, anyway. They have to understand the huge disparity of feelings/expectations/financial constraints faced by the residents of our large estate. ONE SIZE DOES NOT FIT ALL.
Lets look at TC in more detail:
No of units: 560 averaging 1700sq ft each
Site area: 702,162 sq ft
Gross Floor Area (GFA): about 1 million sq ft
Plot Ratio: 2.8
Potential GFA (for any new development): about 2 million sq ft
"Investment sales director, (name) said the 702,458 sqft site has a plot ratio of 2.8 and a potential gross floor area of at least 2 million square feet"
Business Times -23 Jan 2007
So a Buyer has double the aggregate strata title area to redevelop. So even if 100% of the owners opted for a 1-for-1 exchange, he would still have 100% of the site left over for redevelopment.
So from the developer's viewpoint, it's 1-for-2 : buy one; get one free, and if both are sold at double the price then at is effectively 1 for 4
A developer will subdivide the strata area into units of varying sizes.
" It can be potentially redeveloped into a new condominium with about 1,589 units averaging 1,300 sq ft"
Business Times - 28 Mar 2007
"Prospective developers can be looking at building projects with around 1,700 units averaging 1,250 sq ft each"
Weekend Today -27 Jan 2007
Let's look at Waterfront View (ex-HUDC)
En bloc sale price: $385 million by private treaty
Average sale proceeds/unit:  $660,377/ unit
Developer: Far East, Frasers Centrepoint
Date of sale: May 2006
Land price: $241 psf ppr inclusive of DC/DP
Potential Gross Floor area; over 2 million sqft
Projected break-even cost: $450 psf
Why is a 1-for-1 exchange an attractive alternative to cash?
  • you are guaranteed an equivalent replacement home under whatever market conditions prevail at the time of completion. (remember an en bloc sale can potentially take up to 2 - 3 years before receipt of sale proceeds - unlike a normal sale which takes only 3 months). Add to that another 2 years before you can move into your new home....
  • you preserve your special ties with the area
  • you maintain the standard of living that you have struggled so hard to achieve by maintaining the size, level and orientation of your unit (if so negotiated).
  • by not cashing out, you are in fact maintaining or increasing the value of your home.
  • you are not being shortchanged, as was the case in our failed en bloc. [You could only get a new unit at half the size or double the price with the sale proceeds].
  • if you are a single home owner (as most of us in TC are) then this is the best way to preserve your modest wealth. 
Why 1-for-1 is attractive to a developer-buyer:
  • lower up-front financing with each opt-in unit
  • makes for an easier en bloc all round* with fewer objections based on sentimental/financial reasons. 


  1. Just to clarify, South Korea has a number of 'collective exchange' models, or as they call it Joint Collective Renewal. It is enacted by the Housing Construction Promotion Act and the equivalent to our enbloc is called the Jae-Gun-Chuk (JGC), a collaboration between private voluntary owner associations (like MCSTs) and private developers. It is highly successful because of a number of factors, most of which we do not have in Singapore: Most JGC redevelopment projects are over 20 years old, failed minimum structural conditions, have poor heating/electrical structures and were built in the 70s. The biggest factor that make them a success: These estates also have a historical plot ratio of 0.5 to 1.0. The maximum allowable plot ratio in Seoul's urban city planning (master plan equivalent) is 3.0.

    Hence, developers are keen to work with associations because they get a profit equivalent of 2.0 plot ratio. I think collective exchanges may become viable (and Pariah has covered some of the possible scenarios) only if the plot ratio in the master plan expands radically, to allow for developer profit. A move from 1.2 to 1.6 is not likely to appeal to developers. The downside, as one can see in Seoul, is pencil buildings that line the Seoul City scape, because developers built to the maximum allowable plot ratio. It accounts for a radically sudden boom in housing numbers in Seoul, which some would say may not be a good thing (think of Spore's influx of post-enbloc units coming online in 2009-2011).

  2. Yes, the plot ratio would have to be significantly higher before a developer could consider 1-for-1 as an commercially viable option.

    Thankfully, 2.8 is high enough and bear in mind, not everyone would opt for an exchange anyway. Many would prefer to cash out, downgrade in their twilight years or emigrate.

    Singapore's future skyline might not be pencil thin buildings as I believe the Government wants smaller plots to amalgamate (hence allowing for less than 10 yrs to go enbloc). They have taken age of builing out of the equation. Estates will be highly congested, though, with no space for real greenery and lovely Angsana or African Rain trees. Just skinny plants and concrete - and shaking-hand distance between neighbours' bedroom windows.

  3. 1-1 exchange or whatever, TC will not have a successful en-bloc for a long long time. Once bitten twice shy...

  4. Hi, just to check - Tampines Court went from what plot ratio to 2.8 (presumably in the MP2003)? Do you know when was the plot ratio revised (and how often), from the various Master Plans? I've not noticed sharp increases in plot ratios around the central areas, but possibly in the non-central ones, where they're encouraging more growth.

  5. Plot ratio is 2.8 as per Master Plan 2003 for TC.

    Plot ration was 2.5 for Waterfont View.
    Plot ratio is 2.1 for Gillman Heights.

  6. 1-for-1 xchange sounds good. Your reasoning is compelling indeed. I will go for it. Thanks.

    May I ...? The price per sq foot/per plot ratio that ex-Waterfront View SPs sold to developer is est to be abt $191 psf/pr.(580units x $660k divided by 800,000sf x 2.5 pr.) The developer is now selling closer to $900psf avg(W'Gold is only 3rd of 4th development) from the new development. More than 4x... and laughing all the way to his bank... And ex-Mintonrise(The MINTON) was ripped off for $180 psf/pr and the developer is now selling at $900-950psf.

  7. If each unit in TC is paid $1.5m, we are effectively selling only at $420psf/pr( reasonable). With current selling price of W'Gold at $950psf, the developer has $50-80psf profit.

  8. May I ...?

    You may.

    I haven't looked at this in a while - but I will be doing a breakdown of all the Waterfront new projects.

    And The Interlace (old Gillman Heights)
    And The Minton (old Minton Rise)
    And Silversea (old Amberville)

    Developers typically say they make only 10 -25% profit with a new development; but I think they make much more than that. The en bloc wave has moved into the second phase and we are beginning to see just how much the original owners were shortchanged. It is no longer just theory and rhetoric - the actual figures are coming in and I am hoping someone much more adept with financial/numerical analysis than this blogger will do the number crunching.

  9. Let me answer Dr Minority's question regarding our past plot ratio. Tampines Court was an ex-HUDC with a plot ration(PR) of 2.8 even at the time it was built. Like all HUDCs and HDBs, the Govt builds flats NOT to maximise the PR unlike the private developers for obvious reasons. Hence, today the existing PR is 1.5 inclusive of those common areas when the permissible PR is 2.8. So it is a system default and a bonus for all Govt built flats esp privatised HUDCs. It has nothing to do with great enhancement of PR as in other cases.

    Some estates in Singapore tried to plead with the authority to increase their PR. They are wasting their MCST moneys-can be up to $100k to attempt to put in an application. Might as well get Parliament to approve a million dollar in cash for these owners!

  10. "The Gov builds flats NOT to maximize the PR unlike the private developers for obvious reason."

    What nonsense! Have you even looked at the Masterplan? Sengkang is densely packed because it has a plot ration of 3.0. And with the HDB now building multistory carparks instead of above ground lots people are living cheek to jowl.

    Plot ratio in Tampines Court when built was 1.71 - because 20+ years ago there weren't 5 million population to house.

    The increase in plot ratio to 2.8 also applies to all HDBs in Tampines if you care to look at the Masterplan.

    So when those blocks undergo SERS, HDB will maximize every square foot - you can be very sure of that.

    And any new block squeezed into the estate meanwhile will be densely packed, and above ground car lots will become a relic of the past.

    Plot ratios are revised every 5 years.

    New HDB estates have maxed out their current PRs but there is plenty of room still in those estates built 20+ years ago.

    Look at what is happening in Toa Payoh and Bedok. Green lungs are disappearing, Sers rebuilding, claustrophobic living on the increase.