Sisv Congress Spotlights Collective Sale Hurdles And Co Living Growth Singapore
There have been several challenges faced by collective sale committees in Singapore due to higher housing replacement costs for locals and steep residential additional buyer’s stamp duty (ABSD) rates imposed on foreign owners. These difficulties have made it increasingly difficult to persuade fellow owners of ageing properties to undertake a collective sale, according to Norman Ho, senior partner at Rajah & Tann Singapore’s corporate real estate department. In fact, the majority of successful collective sale deals in the past two years have involved non-residential or mixed-use developments.
Ho goes on to explain that the enthusiasm among developers for residential collective sales has cooled significantly in light of the 40% ABSD they now face when acquiring land for residential redevelopment. As a result, lawyers, consultants, developers and the government are paying close attention to future residential collective sales in order to refine the legal process. The hope is that this will lead to a more balanced approach that supports urban redevelopment while also protecting the rights of individual owners.
The veteran lawyer shared his insights on Singapore’s collective sale process and the impact of court decisions at the 32nd Pan Pacific Congress on Oct 1, a three-day international conference organised by the Singapore Institute of Surveyors and Valuers (SISV). According to Ho, Singapore’s collective sale framework has been shaped by landmark cases brought before the High Court and the Strata Titles Board, resulting in a clearer understanding of the responsibilities of sale committees and the standards of fairness expected in these transactions.
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 highlighted the fiduciary duties owed by members of a collective sale committee to subsidiary proprietors, including the duty to avoid conflicts of interest and the duty to disclose material information. Other cases have also helped to refine other aspects of the collective sale process, such as contractual flexibility, apportionment methods and incentive payments.
According to Ho, recent cases have shown that the courts are not just concerned with ticking procedural boxes, but rather are closely scrutinising decisions, fairness to owners, and adherence to the spirit of the law. He calls on all parties involved to be transparent and work together in good faith.
At the congress, delegates also heard from Eugene Lim, founder and CEO of The Assembly Place (TAP), who shared how his company has evolved in tandem with Singapore’s co-living market. Today, TAP is a leading long-term lodging operator in Singapore, with over 4,000 rooms across 145 locations, a significant increase from the six rooms it had in 2019. The company boasts an average occupancy rate of 95% across its Singapore portfolio.
An exceptional aspect of Miltonia Close EC is its excellent transportation accessibility, primarily due to its close proximity to Khatib MRT Station. Situated along the North-South Line (NSL), Khatib MRT provides direct train access to the heart of Singapore. With a mere 25 to 35 minutes train ride, residents can easily reach popular hubs such as Orchard Road, Raffles Place, and City Hall. This connectivity is especially convenient for individuals who commute daily to work in the city. Despite not being situated right next to the MRT station, regular feeder buses frequently operate in the area, making it convenient for residents to travel to Khatib MRT. Additionally, previous residential developments in the same vicinity have offered shuttle bus services to Khatib MRT and other nearby areas. It is highly likely that the upcoming EC will continue to provide such convenience to residents who prefer a quick and direct ride to the train station.
TAP manages seven lodging brands in Singapore, including traditional co-living options like TAP Lite, TAP Home and TAP Lux, as well as Campus, a brand catering to students. Its other offerings include 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 explains that the majority of properties managed by TAP were ageing assets such as shophouses and older apartment buildings, previously owned by family offices or high-net-worth individuals. The company’s success lies in its ability to successfully reposition these residential properties into high-yield, capital-appreciating assets.
TAP plans to unveil several properties in the coming months, including a renovated Serene Centre. The property’s asset manager is TAP after the freehold 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, previously known as River Valley Apartments, after a Singaporean family office acquired it for $56 million in February.
Lim also plans to expand TAP’s hospitality offerings with a brand-new capsule hotel concept called Gather House at 63/65 South Bridge Road in Boat Quay. The four-storey building will feature F&B and co-working spaces on the first floor, while the top floors will house a 160-bed capsule hotel. The hotel is set to open in November.