Daily Archives: 24 Sep 2009

Room for improvement in en bloc laws

Posted on 24 Sep 2009 | Comments Off on Room for improvement in en bloc laws

The 80 per cent en bloc law made it possible for the private sector to take the lead in maximising the value of scarce land

Chip off the old block: The 1970s saw the introduction of larger scale high-rise condominium housing, with pioneering developments such as Pandan Valley (above). It was also during this period that HUDC started building affordable flats on a large scale for the then ‘sandwiched’ group of middle-income families. Among them were Farrer Court, Pine Grove, Gillman Heights and Laguna Park (next)

COME October, it will be 10 years since en bloc sales became a practical reality with the law that allowed an 80 per cent majority to decide the sale of a development, (90 per cent for those less than 10 years old). Before this, there had to be unanimous consent by owners for the sale of a development. To mitigate the effects of ‘majority rule’, safeguards were put in place to protect the rights of the non-consenting minority owners. The key tenet was that any deal must be entered in good faith.

The new regulations were welcomed by many sellers, in particular those who felt held to ransom by a single dissenter in previous attempts, or who saw the entire exercise scuttled because one owner in the estate was uncontactable.

Since the change in the law, over 270 en bloc developments have been successfully sold. The average value of the deals was close to $100 million per development. This compares starkly to the average of $50 million for the 140 deals that took place from 1994 to 1999, before the law came into effect. While the increase in property prices did contribute to the increase, the ability to maximise development potential and extract value was the major factor. The projects sold under the old 100 per cent rule were typically no larger than 50-80 units.

Without the 80 per cent rule in place, embarking on the exercise for large developments with over 100 units was simply unthinkable. Just the thought of one owner being able to scuttle the deal was enough to deter the owners from slogging through the process. Continue reading →

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Posted in En-bloc / Collective Sales, Property Market / Real Estate

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Faux furniture fad or fab?

Posted on 24 Sep 2009 | Comments Off on Faux furniture fad or fab?

Interior designers and shops alike are seeing a trend where clients choose to mix and match high- and low-end pieces, reports FELDA CHAY

THE economic downturn has hit home – with high-end furniture shops and interior designers saying that demand for upmarket furniture pieces has taken a dive. ‘Under the present economic circumstances, it would be disingenuous to state that for the current year our sales have not been affected,’ says Eileen Tan, senior marketing executive at SPACE. Revenue has dipped by a ‘low double-digit figure’ so far this year, she says.

Luxurious: This belt-tightening, however, does not mean that furniture buyers are willing to furnish their homes with less stylish-looking pieces. Instead, they have sought to acquire replicas of the originals, which industry insiders say can be two to five times cheaper than the original

Her views are echoed by Samuel Leong, director of interior design firm Free Space Intent Pte Ltd. ‘Demand has definitely dropped for these high value products as people get more cautious about buying designer furniture,’ says Mr Leong. This belt-tightening, however, does not mean that furniture buyers are willing to furnish their homes with less stylish-looking pieces.

Instead, they have sought to acquire replicas of the originals, which industry insiders say can cost just half or even a fifth of the original. Some of these come from licensed manufacturers such as Vitra, Carl Hansen and Herman Miller. Others are fakes that come from unlicensed manufacturers trying to make a quick buck from home owners who love the design of a piece of furniture, but are unwilling to pay for the original and deem the licensed products too heavy for the pocket. Most of these are made in China.

Given the costs involved in purchasing an original, such a situation is inevitable, says Ms Tan. ‘Including design development royalties and the use of better quality eco-friendly materials, it ends up costing more than replicas, which saves substantially on all these aspects,’ she says.

She separates customers who buy replicas into two groups, one of which she calls the ‘aspirationals’, and the other the group that purchases replicas for the ‘look-alike’ aspect. The ‘aspirationals’, Ms Tan says, are a group that appreciates the design of the piece they buy, and the purchase decision for copies is merely an interim solution for them to own the design before they can purchase the original. Continue reading →

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