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"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."
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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.

SC Meeting No.15

*Updated 5 Nov

RP revised to motivate SPs to sign.
Completely divorced from the value of the land.


Most SPs were not concerned about the technical details of how the RP was calculated, rather they cared only for the amount that they would get by the collective sale.  
The few SPs who have expressed interest in reviewing the technical details have only been offered a visual glance and so only the sale committee can do 'due diligence' on the figures. I am not confident in the SCs ability do do so when one of the exco members does not even have a grasp of the correct age of the estate. Decisions as to the accuracy of the calculations seem to be taken on first sight - with no independent verification done by the members themselves - during the meetings. With all due respect, calculations need spreadsheet analysis not eyeball evaluation. 

The Sale Committee members are first and foremost SPs in the estate. Since they have access to the RLV then we all should have the same. We are all equal and favourtism cannot be shown to anyone- not even the sale committee. We all should have the RLV in our email boxes if so expressed.

We will be paying this MA over $7 Million, they are under our collective employ, I don't want to pay for this shabby service.


Mr Terence also stressed that the SPs are protected by an independent valuer’s valuation report at the close of tender.
It is not independent if the marketing agent is allowed to have anything to do with the selection of Valuer, they should not even be allowed to suggest a Valuer to the SC. We need Mr Vasan to help here, to be on the spot and alert SPS to any collusion between the SC and MA in choosing the Valuer.

Mr Vasan noted what he opined to be discrepancies in the presented RLV and presented a table
tabulated by himself, which showed the RLV from various sources
I believe a truncated version of my calculations were put forward - but they were incorrectly copied from this blog. My calculations are open for anyone to challenge but, please, get the figures correct first!

the net saleable area calculated by Huttons was 1,907,077 sqft (at 97% efficiency which has already factored in the 10% bonus balconies minus approximately 13% for circulation, facilities,

Site Area = 702,155 sqft
Potential GFA = Site Area x 2.8 = 1,966,,034 sqft
Efficiency is 97% of Potential GFA = 1,907,077 sqft     (using Hutton's figure)

Total Saleable Area = 97% of Potential GFA + Bonus GFA. 

(the following is my understanding of GDV only)
When calculating the Gross Development Value (GDV) - and I see no mention of the all important GDV in the Minutes)  - the Total Saleable area is used - not the Net saleable area. Don't be fooled into thinking the common areas in a new development (lifts, swimming pool etc) are built for free, that the 13% is an un-recoverable cost! . Everything is included in their GDV calculations and the eventual psf of new units will be derived from all costs. It is in the best interests of the Developer to build as many units as possible to spread out the cost and make them more affordable to the mass market. It is up to them to assign as much GFA to these common areas as they wish, to maximise profit - and that is why you see more and more developments with no above ground space, rooftop pools and gardens etc. The Developer is only interested in the GDV.

Interestingly, the Minutes make no mention of GDV.

The Residual land valuation (RLV) - from which the RP should be based is the GDV less (Construction cost + Developer profit + Marketing cost + Acquisition cost + DP&DC)

Selling price of new development. ....... Huttons projected an average $1170 psf as the selling price. 

The SC have confirmed through their FB page that the $1170 psf in new development is what Huttons have proposed. Excellent- they have finally caved in on that point. From day 1 I have said $1200 psf was the correct figure.  

Looking back at the SC Minutes no 12 (20 June 2016):

It will be unrealistic to assume selling price of SGD1200/PSF considering that the prospective development will be large with about 1600 units, and it will not be easy to market the development at such high prices as the average price for projects like Santorini is below SGD 1100/PSF

Location, location, location. You cannot compare the unfavourably located Santorini with centrally located TC with easy access to the PIE and airport. But since they have, lets see if their statement is true:




So, on Oct 16th 2016 - at least 3 units were sold near the $1200 psf mark.   With TC's superior location $1200 does not seem at all unreasonable.

SC then took a vote to determine the revised RP for Huttons to work on. Prior to voting, Mr Glen
suggested that Chairman would have the casting vote should there be a tie and there was no
disagreement from the six SC members who were present.

The Chairman does NOT have a deciding vote. Again this shows total ignorance of the law. We have seen it again and again, they are clueless. They had to call for a second meeting to hold the vote again.

Conclusion: the 'PROPOSED*'  revised RP is better than the old RP for sure - but are we being shortchanged even here?

I would be interested in their DC/DP calculations. I think they have hidden a few of our missing millions there... :)



9 comments:


  1. I have some questions on the latest minutes of the SC: 1.) Can they call a second meeting at such short notice? Was it timed to exclude Mr. Vasan? 2.) In the first meeting they clarify which RP was voted for, in the second meeting they do not. So which RP did they vote for? I suppose the fact I am asking question 1, tends to answer that question for me. Given they had to hold a second meeting in the first place, can we add this to the ever growing list of Bloopers. Can we insist Eldan Law attend all meetings in future to advise SC chairman in future before he opens his mouth and lets his belly rumble again. At this rate, even if we enbloc at 3million per unit, with all the mistakes from the SC, would a court declare it null and void anyway? Those holding out for an increased RP are often maligned but do not be surprised if the reason this en bloc fails is due to mistakes caused by the SC

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  2. Easy PIE access does not make it a central location. To many potential buyers such close proximity to an expressway is a turn-off.

    Fair points otherwise.

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  3. Another negative comment. Easy access to PIE is an asset & not liability. Just look at any developers' new launch brochure & see how they love to boast about it when the condo has this asset.

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    Replies
    1. You can call it what you want, to me it's just pointing out the obvious from a buyers perspective. Developers will make anything look like paradise on earth as long as it serves their purpose: Sales and profit.

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    2. Negative aspects of an expressway in such close proximity are: Noise and pollution from vehicles going at high speed, less convenient access to nearby amenities (restricted expressway crossings).

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    3. Why so negative and only highlight the "negative aspect of the expressway"?Apparently you have conveniently chose to ignore that the fact that using the PIE it is just minutes drive away from the airport be it using your own vehicle or taxi. Anyway if you do decide to purchase any units of the new TC or any condo near the expressive way, you can always chose to select a unit not facing the expressway, maybe facing the pool ? Of course you need to fork out more money. There is nothing in this world that is cheap and good. Try harder please. We have heard enough of negative talks on TC !

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  4. Looks like the latest RLV is another butt-feeling balancing act to achieve 80% and MA self imposed upper limit for his perceived cash-strapped buyers. Showing deference and ever mindful of Developers predicament, he restrained from realising the full potential of TC. His latest excuse: longer preconstruction period and 6 mths vacant posession in addition to Silver Zone, too big to swallow, global economic uncertainties, not a clean site, hefty fines and penalties, old estate, development charges etc etc... ad nauseum. Wait, don't Shunfu, Raintree and indeed all Enbloc are subjected to the same? TC should expect similar payout as Shunfu and Raintree.
    Did MA factor in 'alternate construction methods' in his RLV calculations? Interested SP need the RLV to scrutinise and fact check.

    Huttons never fail to put TC in a bad light. Latest salvo: Inferior location to Raintree. Well Mr MA, TC highest resale price was 1.25M, can Raintree match that ! Other agencies (ERA) Mr Eugene Lim, sing praises and are upbeat about Tampines, Why can't you?
    To achieve record prices, decent Property Agents work hard to find matching buyers and ACCENTUATE THE POSITIVE. TC is in no way inferior to Raintree, You are !

    Had you done your homework and snooped for scoops in Enbloc happenings, the untimely, embarrassing and irrelevant letter of 3rd Oct could have been avoided. The poor unfortunate 3 SC members looked foolish.
    Just like the rest of us,it seems that you only get your property updates from local media. You wait for things to happen instead of making things happen. Always behind the curve. Do you deserve +8M to bamboozle, badmouth and undersell our beloved TC?

    Perhaps you believe that your 'superior expertise' in property allow you to bluff (alternate construction methods), misrepresent (Raintree vs The POIZ) and conceal your flawed numbers with mischievously creative,secret RLV calculations with impunity.
    You had been exposed countless times by ordinary SPs of TC.

    (deleted)

    Those that believe that independent valuation is protection against underselling are sorely misguided. Any valuer will play nice with paymaster, SC and value below sale price to effect the sale. In contested Round 1, SC valuer did just that. Minority valuer assessed it to be 90M higher ! 2 professional valuers assessing the same plot came up with grossly different numbers.
    It seems there are as many unscrupulous valuers as there are Unprofessional MA.

    For those planning to sell their apt, then, any Enbloc price would be attractive.

    Think twice if you expect (deleted) when you sign.
    Whatever the RP is, 700M or 1 billion, the well researched and savvy Developers will put in a lower offer. That's just part of negotiation, the art of the deal, gamemanship.
    With knowledge of the original lowball RP with 45% + 20 provisional signatories agreeable to 7xxM the Developers will come in real low. Don't expect too much from overtly inept, poorly prepared, gaffe prone MA/SC combo raring for a quick sale. One for the commission, the other a clean getaway from past blunders and embarrassment. It's biased for a low sell price and a meeting to lower the RP will likely succeed.

    As for me, I won't allow myself to be represented by one who does not defend his honesty and integrity. I'm just one solitary vote. Care to join?

    23 October, 2016

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  5. I fully agree that we should get a reputable independent valuer to give an honest and unbiased valuation for TC. We do not want to be in a rush and simply pick a valuer just like the way we pick the MA. We have learnt our lesson. Valuation is serious business and affects the proceed the SPs will get from enbloc.

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    1. Define 'WE': SC, All signatories, MA/SC, MA only?. Not so simple. Right now, SC is at the helm of this Collective Sale, I assume. Who is going to form another 'Independent committee' to select 'Independent valuer'? Does it have any standing in the STB? Who will pay? It's the MA assigned valuer that counts now. That is until it's challenged at the high court. Then the minority will have their own 'unbiased' paid valuer to advance their case, just as the MA valuer will surely 'justify' this sale, whatever the final price happens to be.
      It all went wrong with the questionable selection of this flawed, mediocre, looking after his own interest/ make my work easy MA. A weak, clueless EnBloc ignoramus SC just exacerbated the problem.

      What little credibility this team had was completely lost with that disgraceful letter of 3 Oct. Question is, will the sweet smell of this enhanced payout overcome the stench of unsavoury people with their dirty tricks?

      Expensive, tedious, vengeful solution is the High Court. See them squirm and suffer. Preferred choice of some.
      More effective is not sanctioning this sale. Don't allow SC/MA to achieve 80%.

      Any other ideas guys?

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