Potential En Bloc Condos in Singapore: Does Yours Stand A Chance in 2022?

Just as everyone thought the en bloc phenomenon was dying down, there was a revival in en bloc sales in the second half of 2021. Alas, the government then stepped in with their new raft of property cooling measures in December 2021, including a higher Additional Buyer’s Stamp Duty (ABSD) rate. That was akin to pouring cold water on prospecting developers’ heads, dampening the en bloc market once again.

However, developers are eager to replenish their depleted land banks. They can do so via bidding for sites from the Government Land Sales (GLS) programme, or turning to the private residential scene.

In the PropertyGuru Singapore Property Market Report Q1 2022, we predicted developers favouring smaller- to medium-sized en bloc launches instead, and that has proved the case. Some larger condominiums have also been put up for sale, such as Chuan Park for $938 million and Lakepoint Condominium for $640 million. So comes the question: does your property stand a chance?

En Bloc in Singapore: What Is It?

First of all, what exactly is “en bloc”, and why can it be so lucrative for those lucky enough to be involved?

The term en bloc (also known as a collective sale) is French in origin, and means “in a lump, or block”, “as a whole”, or “all together”. In Singapore, the term is commonly used to refer to property sales where residents of a usually older development agree to sell their homes at the same time to a particular buyer. It is also colloquially known as en bloc to some homeowners in Singapore.

Usually, this buyer is a property developer buying a private development, which is the collective sale type that this article will cover.

Many homeowners in Singapore hope and pray that their property will be selected for an en bloc sale, and for good reason. En bloc sale prices are usually well above market rate as developers tend to be willing to pay top dollar for a choice site. So, unsurprisingly, a successful en bloc sale can be like winning the property lottery.

En Bloc Sales: How Does It Work?

En bloc sales differ from regular property transactions in terms of scale. In a regular transaction, you’re only selling one property to another individual at market value. In an en bloc in Singapore, the entire private development is sold when a large majority of the owners agree to the sale, and often for prices at higher than the resale market value.

The sale process can also take rather long, often up to two years for the sale to be finalised and for you to receive the sales proceeds.

Developers tend to purchase these properties at a premium, so if you bought your property some time ago when it cost less, you’re likely to walk away with a big profit.

It then hardly becomes surprising that potential en bloc sites are a hot topic among Singaporeans. The question on most peoples’ minds is likely about which properties are next in line.

Related article: En Bloc to Make a Comeback in 2021: A Look at 74 Past Unsuccessful En Bloc Sales

How to Identify En Bloc Potential

While the chances of your home going up for en bloc may not be that high, you can still hope! Here are some signs that your property might have potential.

1. Rising Land Value

If your neighbourhood is undergoing lots of development, such as a new MRT station or a major transformation, the value of land in the area could be rapidly rising, which is a sign of good investment potential from the point of view of developers.

2. Inefficient Use of Land

Old blocks or condo estates that don’t fully utilise their land area are attractive candidates for en bloc sales, as they can be demolished and turned into denser residential developments. If you’re living in a block of flats that has only eight floors where there could be multiple 30-storey condo towers, it’s a tempting investment for a property developer.

3. Old Property

Developers gravitate towards older properties because the value per square metre of land is lower, and residents who live in older properties tend to be a bit more agreeable to collective sales. Furthermore, developers only need to obtain at least 80% of the owners’ agreement for properties 10 years and older, vs. 90% for properties below 10 years old.

4. Robust Property Market

En bloc sales in Singapore involve a lot of money, so they are more likely to happen if developers think they can profit from buying and redeveloping the land. The performance of the market will play a part in how often developers bid for new sites and how much they’ll offer.

Tip: in order to spot future property trends and identify en bloc potential, refer to the Master Plan 2019 to see the government’s plans for land use development over the next 10 to 15 years.

Top Condos with En Bloc Potential in 2022

Here are some condos with good en bloc potential in 2022.

This list is by no means exhaustive, but what you will notice is that they tend to be smaller projects, of freehold status, close to existing or upcoming MRT stations, and have excellent amenities in the area.

1. Cashew Heights

After several failed attempts, Cashew Heights could be trying for another chance at a collective sale, with new rounds of Collective Sale Agreement signing sessions being carried out by residents in April 2022. It remains to be seen if they will receive the necessary number of signatures, as previous attempts were thwarted by reluctant owners.

The 1999-year leasehold condo, built in 1992, has benefited in terms of connectivity from the opening of Cashew MRT station on the Downtown Line, which is located about 10 minutes’ walk away. The opening of new malls over the past decade such as HillV2 and Hillion Mall in the Upper Bukit Timah area has also given the property’s value a boost.

2. Blossom Mansions

Located at Lorong 37 Geylang on the city fringe, Blossom Mansions is a 1995 freehold condo consisting of just 20 units. The last time Blossom Mansions was launched for collective sale in 2018, it was for a price of $32.8 million. 

On the same Lorong as Blossom Mansions is Moro Mansions, which was put up for sale at $30 million on 17 March 2022. 

Sitting on a land area of 10,953 sq ft, the small-sized development looks set to be in high demand by developers thanks to its choice location and excellent connectivity. It is just five minutes’ walk from Paya Lebar MRT station, which offers access to both the East West and Circle Lines. There are two other MRT stations less than 15 minutes’ walk away, Aljunied and Dakota.

The site also occupies an attractive location in the Geylang neighbourhood, with amenities such as PLQ Mall, Grandlink Square and Geylang East Public Library located just a stone’s throw away. Geylang itself is popular for its city fringe location and wealth of dining options, and also enjoys easy access to the Kallang sporting precinct and the CBD.

3. Country Esquire

Thanks to the development of the newly-built Thomson East Coast Line, central location, and proximity to MacRitchie Reservoir, Country Esquire, a freehold condo which received its TOP in 1992, is likely to be a prime candidate for developers scouting for en bloc deals. Consisting of 60 units built across 16 floors, Country Esquire can be considered a small development.

Related article: Nature Parks in Singapore: Condominiums near 7 Popular Green Spaces to Live in (2021)

The development occupies an attractive site right beside the scenic one of the largest nature parks in Singapore, which will be appreciated by those who enjoy living close to nature. There are many condos built in the area, with similar en bloc potential.

Country Esquire is located about 500m from Brighthill MRT station, which is two stops from Caldecott MRT station (on the Circle Line), and four stops from Stevens MRT station (on the Downtown Line). Brighthill MRT station will be an interchange station for the upcoming Cross Island Line. 

Why Do En Bloc Sales in Singapore Command so Much Money?

Since developers believe they can earn a tidy profit from en blocs, they are not averse to paying astronomical sums of money.  As older developments typically do not use space as intensively as newer ones, the Gross Floor Area (GFA) and plot ratio of older developments can be maximised by developers to extract maximum value out of an en bloc site.

For example, if you’re living in an old gated property with low-rise blocks spaced far apart, developers can buy up the land, demolish all those blocks and build 30-storey towers in their place. They can then sell each unit in those towers for more money than it would cost them to acquire that land.

Since a collective sale requires most of the residents to agree to sell their homes, the developers have to convince them that it’s worth giving up their property and moving elsewhere. They do this by offering large amounts of money in the hopes that the residents will take up the offer.

How Have Property Cooling Measures Affected En Bloc Sales?

En bloc offers in Singapore have been slowing down ever since the government started implementing property cooling measures like increasing Additional Buyer’s Stamp Duty (ABSD) rates, which was most recently hiked in December 2021. Developers are now required to pay 40% ABSD, which is a huge sum, given that en bloc transactions can go over a billion dollars.

Here’s a table showing how the ABSD for entities like property developers has increased over the years.

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