A Record-Breaking Quarter

Collective sales for this year are set to hit new record levels, say experts.

In a sign that this year’s collective sales could be even better than last year’s bonanza, the number and value of collective sales so far this year have not only exceeded what was achieved in the same period last year but also beaten the record $2.41 billion set in 1999.

Based on preliminary data as of mid-March, there have been 17 collective sales transactions worth a total of $2.43 billion. This surpasses both in quantum and value the 14 transactions worth $1.3 billion for the whole of the first quarter last year, says a report by Jones Lang La Salle (JLL).

“We expect this bullish collective sale market to continue well into the first half of 2007,” said Mr Lui Seng Fatt, regional director and head of investments at JLL.

Along with the record volume of transactions, new highs in prices have also been set with the Parisian sold in January for $228.1 million, which works out to $1,743 per square feet (psf) of potential gross floor area.

This is 21 per cent higher than the record set in October last year by Ardmore Park, which was sold for $1,369 psf.

The Parisian and Ardmore Park are by no means stray swallows — there has been a spate of near record-setting collective sales over the last few months.

Among these are Anderson 18 sold to a joint venture company formed between City Developments and Wing Tai earlier this month for about $517.8 million, which works out to $1,650 psf of potential gross floor area.

Another is the purchase of Gillman Heights for $548 million by CapitaLand, which set a record for such sales in absolute dollar terms.

The growing demand for good sites will see en-bloc activities filtering into the secondary areas, said Mr Lui.

This is demonstrated by the fact that 12 of the 17 collective sales transactions so far this year involved sites located outside the Orchard Road-Scotts Road area.

Farrer Road, the Thomson area and the East Coast are also emerging as new collective sales sites as witnessed by an increasing number of en-bloc sales there. These include Leedon Heights and Tulip Garden in Farrer Road, Balestier Court in the Thompson area and Palm Beach Gardens and Ocean Apartments in the East Coast.

“The filtering effect to the secondary areas will continue and we expect the secondary areas to strengthen further this year,” said Mr Lui.

“With the going rate we may even see another record set for the secondary areas, especially those around the East Coast district that are near or along major transportation areas.”

Source: Today, 17 March 2007

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