Sisv Congress Spotlights Collective Sale Hurdles And Co Living Growth Singapore
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According to Norman Ho, senior partner of corporate real estate at Rajah & Tann Singapore, the high housing replacement costs and steep residential additional buyer’s stamp duty (ABSD) imposed on foreign owners have made it difficult for the collective sales committee of ageing properties to convince their fellow owners to attempt a collective sale. This has resulted in a decline in enthusiasm among developers for residential collective sales, as they now face a 40% ABSD on land purchased for residential redevelopment. As a result, most of the successful collective sales deals in the past two years have involved non-residential or mixed-use developments.
At the 32nd Pan Pacific Congress held on October 1, Ho shared his insights on Singapore’s collective sales process and the impact of court decisions on this matter. The three-day international conference, organized by the Singapore Institute of Surveyors and Valuers (SISV), brought together lawyers, consultants, developers, and government officials to discuss and refine the legal process for residential collective sales. Ho hopes that these discussions will lead to a more balanced approach towards residential collective sales, one that supports urban redevelopment while also protecting the rights of individual owners.
Ho highlights the role of landmark cases in shaping Singapore’s collective sale framework. These court decisions have helped to clarify the responsibilities of sale committees and the standards of fairness expected in these transactions. For instance, the attempted sale of Horizon Towers, a 99-year leasehold condo on Leonie Hill Road, was overturned by the Court of Appeal in 2009 due to improper handling of the sales process. This case highlighted the fiduciary duties owed by collective sale committee members to subsidiary proprietors, including the duty to avoid conflicts of interest and disclose material information. Subsequent cases have also helped to refine other issues throughout the collective sale process, such as contractual flexibility, method of apportionment, and incentive payments.
Ho emphasizes that the courts are not just concerned with ticking procedural boxes, but they also closely examine how decisions are made and whether owners are treated fairly. He calls on all parties involved to be transparent and work together in good faith.
At the conference, Eugene Lim, founder and CEO of The Assembly Place (TAP), also shared his insights on the evolution of Singapore’s co-living market and how his company has adapted to these changes. Today, TAP is an established long-term lodging operator in Singapore, managing over 4,000 rooms across 145 locations with an average occupancy rate of 95%. The company manages seven lodging brands, including traditional co-living offerings, student accommodation, homestays, and its recently launched boutique hotel.
Lim explains that TAP’s success lies in its ability to reposition ageing assets, such as shophouses and older apartment buildings, into high-yield, capital-appreciating properties. The company’s upcoming projects include a renovated Serene Centre and a new serviced apartment at 400 River Valley Road. They also plan to launch a new capsule hotel concept, Gather House, in November.
In conclusion, the 32nd Pan Pacific Congress brought together industry professionals to discuss and refine the collective sale process in Singapore. With the help of landmark cases and ongoing discussions, the hope is to strike a balance between supporting urban redevelopment and protecting the rights of individual owners. As the co-living market continues to evolve and mature, companies like TAP are adapting and expanding their offerings to meet the changing demands of the market.