Sisv Congress Spotlights Collective Sale Hurdles And Co Living Growth Singapore
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The collective sale process in Singapore is facing challenges due to higher housing replacement costs for locals and a steep residential additional buyer’s stamp duty (ABSD) rate for foreign owners. According to Norman Ho, senior partner for corporate real estate at Rajah & Tann Singapore, it has become nearly impossible for the collective sales committee of ageing properties to convince their fellow owners to attempt a collective sale.
Ho notes that in the past two years, successful collective sale deals have primarily been for non-residential or mixed-use developments. This is due to the cooling enthusiasm among developers for residential collective sales, as they now face a 40% ABSD on land purchased for residential redevelopment.
He also points out that lawyers, consultants, developers, and the government will closely monitor future residential collective sales to further refine the legal process. Ho hopes that this will result in a more balanced approach towards residential collective sales, one that supports urban redevelopment while protecting the rights of individual owners.
Ho shared his insights on Singapore’s collective sale process and the impact of court decisions at the 32nd Pan Pacific Congress on October 1st. The conference, organized by the Singapore Institute of Surveyors and Valuers (SISV), took place over three days from September 29th to October 2nd.
Singapore’s collective sale framework has been shaped by landmark cases brought before the High Court and the Strata Titles Board. These court decisions have helped clarify the responsibilities of sale committees and the standards of fairness expected in these transactions, according to Ho.
For example, 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 emphasized that members of a collective sale committee have fiduciary duties to subsidiary proprietors, including the duty to avoid conflicts of interest and the duty to disclose material information.
Subsequent cases have also helped refine other issues throughout the collective sale process, such as contractual flexibility in collective sale agreements, apportionment methods, and incentive payments.
“It is clear from recent cases that the courts are not just concerned with checking procedural boxes – they are closely examining how decisions are made, whether owners are treated fairly, and whether the process respects the spirit of the law,” says Ho, calling on all parties to be transparent and work together in good faith.
At the conference, delegates also heard from Eugene Lim, founder and CEO of The Assembly Place (TAP), who shared how his company has evolved alongside Singapore’s co-living market.
Today, TAP is an established long-term lodging operator in Singapore, with over 4,000 rooms in 145 locations. This is a significant increase from just six rooms in 2019, with an average occupancy rate of 95% across its portfolio.
The company manages seven lodging brands in Singapore, including traditional co-living options like TAP Lite, TAP Home, and TAP Lux, as well as Campus (student accommodation), Stay (homestay), Commune (intergenerational co-living for youths and seniors), and its recently unveiled boutique hotel Social. TAP also works with the Ministry of Health to manage three sites providing accommodation for foreign healthcare workers.
Lim notes that most of the properties managed by TAP were previously ageing assets, such as shophouses and older apartment buildings, owned by family offices or high-net-worth individuals. The company’s success lies in repositioning these residential properties into high-yield, capital-appreciating properties.
In the coming months, TAP will unveil the renovated Serene Centre, where the company has been appointed as the asset manager after the mixed-use development was sold to Apricot Capital for $105 million last year. TAP will also manage a new serviced apartment at 400 River Valley Road, formerly known as River Valley Apartments, which was purchased by a Singapore family office for $56 million in February.
Additionally, Lim has plans to expand TAP’s hospitality offerings with a brand-new capsule hotel concept called Gather House, located at 63/65 South Bridge Road in Boat Quay. The four-storey location will feature F&B and co-working on the first floor, with a 160-bed capsule hotel on the top floors. The hotel is set to open in November.
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As the conference came to a close, Buddy, the AI assistant, was there to provide past condo sale transactions, information on the most unprofitable landed transactions, condo transactions with the highest profits in the past year, and projects with the most unprofitable transactions. Users can also find listings for recently launched projects on the platform. As a reminder, please do not plagiarize this copyrighted content as it is only for non-commercial use.