Update on 8Napier

Further to the last posting on the new development at Eng Lok Mansion, Business Times has provided new information on "8Napier" on 17 July 2007.

No of units: 46
Price range: $4000-$4500 psf
Developer: Napier Properties. Director Mark Wee & Tony Tan, former Parkway boss.
Details: 10 storeys, 40 apartments of 3-4 bedroom units, and 6 penthouses. All penthouses are duplex ranging from 4000 sq ft to 6000 sq ft and are expected to be sold by auction. Smallest 3 bed unit is just over 2000 sq ft and priced at about $8 million. Some units are already sold to a mix of Singaporean and foreign buyers. Current plan is to limit sales to just 10-12 units.

'We may sell another dozen or so apartments when our showflat is ready on site in a few months' time. But we plan to keep the rest of the project, including the six penthouses, for sale after the project is completed, which will probably be around end-2009' said Mark Wee.

'All the units come fully loaded with top-notch lighting, sound system and kitchen equipment, bathroom fittings and the like, so that our buyers do not have to do any renovations as we are fitting the units to the highest standard currently available in the Singapore market. This should minimise the hassle of moving in' said Mark Wee.

Points to note:-

• A replacement unit for owners if they want to stay in the same location and have to buy a unit in 8 Napier will cost only $8 million for a 3 bedroom 2000 sq ft unit. In the latest offer from CBRE, how much more will you have to pay out of your own pocket to buy a replacement unit?
  
• $4000-$4500 psf currently. That is the market benchmark for the area and I'd doubt any developer who buys BGV will attempt to sell new units at anything less than what 8Napier is marketing.
• Napier Properties are holding back units till end 2009, especially the prime penthouses. This shows their confidence in the market, and their expectation that they will achieve even more than $4000-$4500 in 1 and a half years time. Given the latest estimate of 20% increase in property price per annum, it would be fair to say they should be targeting about $5000 psf by end 2009.
• In a Business Times report dated 10 Nov 2006, they priced the units at a 'high $2000 psf' but 6 mths later, revised it to $4000-$4500 psf.
• That report also cited Mark Wee as stating that some of the priciest real estate in global cities like New York and London is around famous parks, and 8 Napier, which is just two minutes' walk to the Botanic Gardens, will be in that league. If 8Napier is in this league, what about BGV which is 30 seconds away from the Gardens?
• Profit to developer? They bought Eng Lok at $128million ($1218ppr) in Mar 2006 but they stand to gain a cool $344million (less development costs and proceeds). This for an estate half the size of BGV. What a steal for Napier Properties. Will this happen to us as well, to be sold on the cheap?
• To say that we have a goldmine on our hands, a piece of real estate around a famous park, is an understatement. But some people don't really care.
  

Tags: 8 Napier, 8Napier, Eng Lok Mansion, Napier Road, Botanic Gardens View, Botanic Garden View, en bloc, singapore, en-bloc, collective sale, enbloc

Is Collective Exchange a Good Deal?

For those of you who missed out on the meeting on Friday evening (and there are lots of you, from what I gathered from the upset crowd), here's some information from the Huttons presentation on collective exchange for BGV. Information provided here is based on what I've heard in the presentation and is provided as is, for the sake of transparency in the ongoing en bloc of BGV.

First, about Huttons :-

• They are 'affiliated' with Savills, but in terms of en bloc experience, it is unclear what they have done. They claimed to have completed one project (Tulip Gardens) but that's by Savills. They said they have 2 ongoing en bloc projects.
• What annoyed me and many others who felt they'd just wasted our time, was this - they were NOT invited by any owners to give the presentation at BGV on Friday!! In fact, if you checked the letter sent out by them, addressed to Mr Tan Chew of the Management Committee, as 2 members of the MC (including the chairperson) pointed out at the meeting, (1) there is no such person as Tan Chew, (2) while Huttons did speak to the chairperson, the latter did not give any greenlight for Huttons to use his name, neither did he give permission to Huttons to do the presentation.
• In fact, when someone asked if they have a protem sales committee formed to represent the collective exchange deal, the agent said they're in the process of forming one. When asked further, no names were provided and no owner from the crowd stood up to represent BGV in any way. This makes it very suspect if the agent even has any owner in BGV who is willing to represent all owners in the deal.
  
• It is not known where they obtained the namelist of owners from, since a number of them did not receive their letters in their registered addresses.
  
• They were apparently not aware that an existing protem sales committee had been set up with CBRE as the agent.
• They have a lawyer who will help draft the CSA, but that lawyer is not Phang & Co who is the only company that really specialises in collective exchanges, and has done the only successful exchange thus far (Paterson Lodge).
  

Now about the collective exchange proposal:

• The agent is in talks with 2 developers who have expressed interest in our super prime land. The sale will not be done by tender, but by private treaty between the owners and the developer.
• Prices in the letter are indicative only, and not confirmed. In fact, the figures in the two tables are more similar now so whether you do an exchange or opt out, you'll be getting the equivalent value.
• Huttons claim that while there are height restrictions due to proximity to Botanic Gardens, the developer can use a staggered design, so that it's only 4 storeys from the sides closest to the gardens, and then building up to 1.8 plot ratio further back into the estate, possibly higher storeys.
• While the exchange units are 30% smaller, owners can opt to 'top up' to their original size according to the formula : for the first 10% of the existing area = $2000psf, thereafter it's $2700psf. In other words, to retain the same size unit that you currently have in the new estate, you must pay the developers (upwards of $150-200k approximately)! To retain the 'same size'! We're not even talking about same facing, same floor yet.
• The most ironical part of the collective exchange proposal is that not everyone can obtain an exchange unit. It is subject to balloting. Like HDB flats. The exact number of exchange units are not known (can be anything from 1 to ?? depending on the developer and the deal). It is also not known how the balloting will be done (eg if you sign up earlier, will you get preferential treatment) and if you only want an exchange unit and not opt out, if you're unsuccessful in the ballot, can you pull out of the CSA (unlikely).
  

Some owners were very upset that this is happening in BGV - an agent coming in to give a presentation without permission from any owner at all. Some asked why is there a need to even consider selling the estate since it's in a prime location (as the agent willingly pointed out). Some questioned the integrity of the agent and their track record in pulling off what may well be a half-billion dollar deal. One owner suggests that since there is a crowd interested in collective exchange, that perhaps like-minded owners should get together to discuss this idea further, solicit from other agents (including Huttons) with the understanding that Huttons might not be the finalised company to handle an exchange deal.

I left very disturbed - how can an agent appear on our doorsteps without even the management committee's permission and attempt to sell themselves? I noticed that a good number of owners are in their late 40s and older; for these people a collective exchange is certainly ideal if they can stay in the same place again. But questions about collective exchanges remain:

1. Out of hundreds of en bloc deals that happened this year and last, only one was successful in a collective exchange (Paterson Lodge). Why is that so? I understand that for them, a 100% consensus was obtained and the logistics and legalities surrounding exchanges are not easy at all. Partly because it is not legislated (unlike Australia as mentioned by Dr Minority here) and partly because there's always different interests involved in the sale of an estate.
2. Because we won't really see the final product (our units) until the developer's built the whole place up, how will we know what we'll end up getting? Will we even have any say in the matter (will the architect give us plans/designs), will they let us know what floor, facing, size we'll be getting? Are they getting in a Feng Shui geomancer to ensure the place has good flow?
   
3. Given that next door's going to be a superluxury condo (Napier 8), will there be anything stopping a developer from giving exchange units that are nearest the road (for example), leaving the units they will sell at exclusive spots further in?
   
4. Also, even though a new development might have new units, it'll also have higher maintenance fees and an influx of tenants, possibly more than what we currently experience on the small roads and estate (since a developer will want to have more units in the estate than currently). Can we handle that?
5. If an exchange is done by private treaty, we won't know what's the maximum value of the land (since no bidding is done). We won't know what's the best value we can get when we sell our homes (if we do). If done by tender, on the other hand, we won't know what developer will we end up with, and what design/structure we'll get. There might be all sorts of unused spaces (corners, balconies) that make up to the size allotted, after all. Look at some of the new developments nowadays with wasted spaces in the units.
6. Ultimately the question is this - given that we're sitting on super prime land (it will always be a land in demand), and given that our place is still nice, big, spacious and well-maintained, does it make sense for us to sell BGV off now?
   

Can we ever find a place like BGV that we can call home? Our family, for one, won't.

Tags: collective sale, collective sales, en bloc, en-bloc, en-bloc sale, enbloc, enbloc sale, botanic gardens, botanic gardens view, napier 8, napier road, singapore

Sales Committees - More to Come??

(See below for an update on 19 July 2007)

Over Monday and Tuesday nights, most of us would have received the letter proposing "One to One Exchange" by Huttons Asia Pte Ltd (hand delivered and taking each unit's attendance). Huttons Asia is another real estate agent. They are different from CBRE. So what does this mean for us, the resident-owners of BGV?

Are there now two agents working for the one and same Sales Committee (SC)? Highly unlikely! Dear resident-owners of BGV, it looks like there are now two SCs and their respective agents for our estate. Not unlike what is happening in some other on-going enbloc estates, e.g. Watten Estate.

There is going to be a mad rush and fierce competition now between these two sales committees (SCs) and their respective property agents vying for our signatures on their CSAs. Especially so if both teams are trying to beat the clock before the government comes up with a new legislation regarding enblocs in the 3rd quarter. Be it the "Straight Cash" offer or the "One for One Exchange" offer, be it for or against the enbloc, we need to be very, very careful. We will need to hear and get all the information we need in order to make informed decisions about what is in our best interest - to sell or not to sell, to sign or not to sign.

Several (MESSY) scenarios can happen:

• What if an owner signs both CSAs? Which CSA will apply, the earlier one or the later one? Bearing in mind that the CSA is a legally binding document, what will happen to the owner who signs on both CSA? What will be the legal consequences for the owner?

• What if after an owner signs on one CSA and then realised that the other CSA is a better deal, can the owner back out of the one signed? Again because the CSA is a legally binding document, what will be the legal consequences for the owner for backing out of the "worse-off" CSA? What discourse is there for the owner?

• Who can we trust - the SCs, the agents, the lawyers? NO ONE! We can only trust ourselves. At presentations and owners' meetings, SCs, agents and lawyers often tell the abridged version of what is included in the CSA. Often it is the UNSPOKEN that is more important. Unless you are a lawyer yourself, it is most difficult for laymen like us to fully understand the clauses in the CSA within a short period of time such as during the presentation, let alone to sign the CSA at the same time which often the SCs and agents will try their best to get you to sign as soon as possible!!! As a rule of thumb, when in doubt, ASK questions! DO NOT be pressured into signing anything even if you have the smallest of doubt. TAKE THE TIME to examine each clause carefully. You definitely do not want to realise, after signing the CSA, that you have just given up all of your rights to the SC and agent and lawyers to do what they like with your home. Afterall, this is OUR HOME, not theirs. We can only trust ourselves to look after our own interest, no one can do that for us and no one will do that for us.

• If you survived the pestering at the presentation or owners' meeting and resisted the signing, do not rejoice too early. You may not be able to think in peace in the sanctuary of your home too. What is there to protect us from being badgered by both SCs where each SC will definitely be most competitive and aggressive to obtain the prerequisite 80% ahead of the other SC? As Dr Minority so candidly stated, "Imagine - Monday Huttons rings your bell, Tue CBRE rings your bell, Wed Huttons comes back to clarify some stuff CBRE might have said, Thu another party calls you to say that "the other party smokes pot", Fri both parties call you to say that "the competitor is in league with Voldemort, don't go near them". Sat you just want to cast the Cruciatus Curse on the SCs. Sun you plan to expelliarmus the annoying SC mugglies and boot them out of the estate." (Dr Minority, 19 July 2007)

• Now that there are two SCs formed in our BGV. What is there to stop a 3rd SC or even a 4th SC from forming within our estate?? Can't the Management Coucil step in to regulate the situation before it turns totally ridiculous? We do NOT fancy having to "entertain" home visits and phone calls from the various SCs and agents after a long day at work. We have better things to do within our safe haven.

There are IMPLICATIONS for EVERYONE of us, both BEFORE and AFTER we sign. Thus , we urge all resident-owners to think very, very CAREFULLY.

We do find the whole situation getting absurd, especially now with a 2nd SC. As it is with the 1st SC, we found information lacking and not forth-coming.

As our blog states, we are only asking for transparency, equity and accountability from these people. But it seem we are not getting these simple things....

Huttons Asia will be holding a meeting this Friday 20 July, from 7pm to 10pm at the Function Room. Those of you have the time to attend, please look through the letter that was given to us and ASK QUESTIONS. We can only look after our own interest.

Here is the link to Dr Minority's latest post from which we cited his candid remark: http://enblocsingapore.blogspot.com/2007/07/worrying-trend-of-self-replicating.html

Once again, we acknowledge and thank Dr Minority for his help.


UPDATED 19 July 2007, 9:22pm

We have heard from some owners, who do not stay at BGV, that they did not receive the letter from Huttons because it was hand delivered. They were most unhappy about the situation. The SC and its agent, Huttons has neglected to take into account the owners who do not stay here at BGV. So NOT all owners are informed about the up-coming meeting this Friday 20 July, 7-10pm, which will affect every owner in one way or another. The choice to attend or not has been taken away from these owners. Equity?? As this goes to show, there is already A LACK OF EQUITY!

Another resident-owner has also reflected to us that when the Huttons people came round to deliver the letter, they did not even get the basic owner information correct for their particular unit. They had asked for another person who lives there but is NOT the owner at all! NOW this certainly makes us wonder where Huttons has gotten their name list from???

Conflict of Interest

Most of us, the residents of BGV would have received a document dated 18 June on the Resolution Passed at the 22nd AGM.

Under 4.0 Election of Council Members, we would see a list of 7 members who were elected as members to the Management Council. If you look very carefully, you would see that one of the names has appeared in another letter (sent to us on 14 March 2007 by CBRE) as one of the members of the Protem Sales Committee. Do you see a problem here? Let us explain.

The Protem Sales Committee (PSC) of BGV has been formed - members were self-elected, already bringing into question how many of them are truly for the interest of all the residents of BGV, or only serving their self-interest - to sell off our BGV as quickly as possible (refer to CBRE letter dated 22 May 2007: their timeline reflected the urgency with which they are trying to get a sale for BGV as soon as possible!). The Management Council (MC) is formed to monitor the funds collected by the managing agent of the property, to engage the agent to make repairs, upgrades, maintenance of the property, on behalf of all owners.

Here lies the conflict of interest when a member of the MC is also a member of the PSC because the mandates of the MC and the PSC are totally different!

"The mandate of the MC is to maintain or update/upgrade the development whereas the mandate of the SC is to sell off the development in whatever condition it is in, as quickly as possible". (Dr. Minority, 5 January 2007)

There are a number of consequences: (we have reproduced what Dr. Minority has so aptly described)

1. Because the MC (who is in most cases effectively the SC) is in charge of the maintenance fund of the condominium, they have a say in whether to use it to maintain the property or even to upgrade/update it. But because they are the SC, there is no incentive to maintain, to paint the exteriors, to make repairs, when their primary purpose is to sell the place off. Why waste that money if the buildings are going to be torn down? Effect - the place gets run down.


2. Because the place gets run down, the SC will tell owners of the downsides if the sale does not go through - increasing maintenance funds required to upkeep the place (which if they had maintained in the first place, would not have been a major issue), place getting more decrepit driving rental and property value down.


3. Because the MC is typically the first group to become aware of en-bloc potential for the development, they typically freeze any repairs, maintenance etc to push owners into selling. So they know that once the 10 year age mark is reached for the property, they need only 80% agreement for the sale to go through. In effect, they stop the upkeep of the property except for the bare minimum (eg security, electricity, sports facilities). Forget painting the exterior or interior, forget updating or upgrading the place, even if the MC has the sinking fund to do so.

Therefore, we believe that any member of the PSC should not and cannot be a member of the MC to ensure there is NO conflict of interest and to ensure there is neutrality and fair play in the enbloc. As such, one member of the PSC in our BGV MC is already one too many!

PS. We would like to acknowledge the fact that our past MC has been doing a great job in the upkeep of our BGV estate. Thank you. We hope the new MC will continue to do so.

(Thanks to Dr Minority for allowing us to reproduce portions of his Myth #2 post)