For the EOGM (called to discuss en bloc), the agenda will be :
(1) en bloc or no en bloc
(2) if en bloc, then decide on a minimum reserved price
(3) select sales committee members
suggest :
(a) what you want to listen
(b) what you want to say
Appreciate comments WITH name & unit number.
Latest update
• Teresa Ville Protem Sales Committee (TVPSC) met on August 25, 2007.
• In responses to invitations to 5 Property Agents and 5 Legal Consultants, there was positive response only from following property Agents
o Jones Lang LaSalle (JLL)
o Huttons
• None of the invited Law firms accepted their invitation.
• In last week of August 2007, a number of amendments in the Law governing process of Collective Sales were proposed. These proposed changes also include process of selection of Property Agents and Law firms.
• On recommendation from one of the subsidiary proprietors, an invitation was sent to a Law firm named De’souza Tay & Goh, who agreed to meet.
• On September 1, 2007, all 3 above mentioned firms met TVPSC members.
o De’souza Tay & Goh law firm presented their credentials and briefly explained salient points of proposed changes in Law. As per their view, Teresa Ville Protem sales committee shall be deemed as lawful, as it was formed in a duly convened EOGM.
(This is one of the requirements in proposed changes in Law. )
o JLL had a discussion with TVPSC members, who suggested that they should wait till new Law comes in force, before proceeding further.
o Huttons, gave a formal presentation on their experience and proposal to act as the Marketing Agent..
• Following TVPCS members submitted their resignation as committee members, due to work commitments –
1) William Phua (August 20)
2) Jacqueline Boudeville (August 24)
3) Philip Ang (September 9)
4) Kum Kong Chan (September 13)
In meeting of August 25, members unanimously agreed that since there were sufficient number of committee members, instead of looking for replacement, committee would continue to function with remaining members.
• Despite proactive efforts to invite more Property and Legal firms, there was not much success in getting positive response. It is a general presumption that most of Property Agents and LawFirms are waiting for the new Law to come in force (expected in October 2007). They might like to study impact of new law on scope of their role, responsibilities and costs before giving a serious proposal.
It is therefore decided that instead of evaluating only limited number of candidates and proceeding further, they should wait till the new Law is in place.
TVPSC shall now meet, only after the New Law is in force and shall proceed as per the provisions of new law.
Thank You..
Update...
A quick update
EOGM was convened on 28 July Saturday at 3:00 pm at Function Room 2&3 in TeresaVille, & following :
(1) 59% quorum was achieved
(2) 76% of the quorum voted "FOR" collective sales.
(3) A Reserve price of 850+ million for the entire estate was fixed by majority vote. (proposed 800+, 850+, 900+)
(4) A sales Committe of 15 members was selected & endorsed.
Any comments/views, please share in the post below. Cheers !
EOGM was convened on 28 July Saturday at 3:00 pm at Function Room 2&3 in TeresaVille, & following :
(1) 59% quorum was achieved
(2) 76% of the quorum voted "FOR" collective sales.
(3) A Reserve price of 850+ million for the entire estate was fixed by majority vote. (proposed 800+, 850+, 900+)
(4) A sales Committe of 15 members was selected & endorsed.
Any comments/views, please share in the post below. Cheers !
12 comments:
WARNING!
Make sure SP's have the option to review the reserve price EVERY 3 MONTHS. Do not give the sale committee and the 3 authorised representatives complete and total control over all issues.They must be held accountable to you, they must not merely hold unminuted dialogue questions where residents may vent their anger but they, the SC, ultimately do nothing.
SP's must receive all minutes of SC meetings.
I am not so educated as others, as could see from my written English, but I know that Teresa Ville is full of very educated people, we have business consultants, bankers, lawyers, I T Consulatants, accountants etc etc , and I dont understand if I know the pro and cons of enbloc, why the majority of Teresa Ville residents do not know what to do and need to be informed in an EOGM. I said majority which to me is more than 50%. For me, if I agreed on the enbloc , I sign the CSA, if I dont agree, than I dont sign . It is as simple as that. It is not an easy solution to find everybody a replacement home, as at most it would be like Farrer Park, the residents has the right to choose a unit beforehand ,nothing else as we have 270 units here. It is easy to say than done. I strongly believe most of us know what to do after an enbloc sales, especially after all the newspapers report .
STV should stick to save teresa ville, i.e. save the homes of some residents, who has feeling in their home and will not sign the CSA, instead of have an agenda to have another sales committee. So please dont try to have another sale committee which will split the % in the CSA. If majority agreed the enbloc, my pledge to all all is to just join the present committee and share with them all your suggestion etc so as to make the enbloc sucessful and transparent, and please dont try to do anything before the law said so.
This will be my last comment in this web site.
P S Tio
For selection of Lawyer & Marketing agent for such an enormous multimillion dollar (800m$ ++)transaction, detailed specifications should be drawn which include:
(1)Jobscope,
(2)penalty clauses,
(3)schedules
(4)accountability
We are reading in newspaper that in one case lawyer is charging legal fee and is pocketing the interest as a stakeholder on top of that.
To determine the reserve price, you first have to get a FORMAL Valuation report. Do NOT let the property agent decide on the reserve price as it will be a price he feels he can sell the property expediently. Check all notices for small print that may include 'estimated price only'. If it's there, it may be on the expression of interest notice (the first flyer!.. who would notice that!).
Add a clause into the CSA which says the SC has to seek your permission before agreeing to a sale. Learn from other's mistakes.
Another method of sale is to use "expression of interest" to gather bids of interest from developers or international real estate fund managers who whsh to jointly bid with local developer, etc.
Such expression of interest is useful as it is non-binding to both parties - i.e the bidder and seller.
As there is no reserve price, in the expression of interest, there is no obligation to sell the estate to anyone submitted in the bid.
Expression of interest could be sent to developers, fund managers etc to invite their "expression of interest" to bid on the enbloc of your estate.
For all your know when the the expression of interest is returned, there will be more than 10 or even 20 bidders who put a bid on it.
When the bid is all returned, the management council could then convene a EOGM to have the appointed committe opens up all the bids submitted to all the attending residents of the estate.
The bids are then ranked and tabulated from the highest to the lowest bid on the whte board for all the residents to see it.
Since expression of interest is a non-binding contract, the residents could see for themselves where the enbloc value of their estate will stand should an enbloc is held.
And, let say from the highest bid submitted, the residents could then calculate how much psf they could get on the sales of their flat should the highest bid price is to be considered.
If residents think that the offer by the highest bidder could be further negotiated for more money from that point forwards of the highest bid offered, they could ask the council to set up a interim sales committe to negotiate on that offer for more money.
If the final offer comes in, the residents could still decide if they want to proceed with the enbloc or not.
This is open option still opens to residents as the council have no yet ask the resident to vote for a mandate to enbloc the estate.
If residents think that the price of the bid offered to them on psf- wise is lucrative, they will surely make up their mind to vote at the coucil meeting for a enbloc process to take place on that offered price forward.
That means the residents is willing to consider the forward price of highest bid only - no price backtracking backward.
Any bidder can revise their bids and this give more room to bidders to up their bid price again.
The Expression is a better method as is does not force any resident to decide the sale of it yet. It also forbids sales commitee to set the reserve price. It forbids the commitee from the obligation of proceeding the sales to the offerer should the offer price was above the reserve price set in the bidding process.
On my opinion, it is good to sell it if the price offered is enough to pay for the purchase of a similar sized unit in a escalating price two years from now in the current market.
This is also to factor that the sales takes 7 to 10 months to complete that includes strate title board to approve the sales of it.
The 80% of money from the enbloc sales of the estate will take some 8 to 10 months to be given on completion.
That means the price of the new flat could then have gone up and eroded again.
Thus the extra money factored in the sales price is for 2 years forward of usch potential price erosion that take away from buing a similar sized unit again.
I am not owner of teresaville. I am a reader that chanced upon your blog.
Viva Sera
23 July 2007
Just a quick comment re Expression of Interest.
My understanding is that any CSA must contain a reserve price. Whether the bid is obtained by EOI or Tender or Private Treaty is irregardless of the fact that there is a RP that all owners have to agree to when they sign the CSA.
Also EOIs are used by agents for 2 main reasons - (1) to let developers know that they are nearing the 80% mark and that developers can make a bid with the confidence that their bid will be seriously taken. ie, no developer will bid in an EOI if only 30% consent has been obtained. (2) to let borderline owners/owners who have not signed the CSA know that bids have been obtained with a certain amount in terms of sale price, and this may push the remaining owners to sign up the CSA so that it can be executed.
Furthermore bids from EOIs have a deadline or validity period. After this, they are nullified. Which is why some estates go through EOIs and then a few months later, revise their RP and go for a public tender.
An EOI is not valid if the CSA has not reached its 80%. However, once 80% have signed up, and if the bid in the EOI exceeds the RP stated in the CSA, the owners HAVE to accept the bids. That is what happened in my estate, where an EOI was conducted when only 72% signed up, when the bids came in and it exceeded the RP, another 8% signed the CSA, hence executing it and legitimising the bid which they had to agree to.
One must not be "perceived" to be greedy when asking more money for an enbloc sales of the estate.
It is obvious that when we enbloc the estate, it is for more money.
If not, why should we want to enbloc it in the first place, right.?
We can sell outr flat on our own. but the price will nto be the same. It could be half the enbloc price offred on the unit.
So, in short, we should not degrade each other for being greedy for enblocing the estate so readily.
The key is to sell at the right enbloc price.
So my advice to you all is to seek out developers with deep pocket to pay for the enbloc of the estate.
Ask a internation well known estate company to market the enbloc in the interational market.
This is to seek out the rich deep pocket buyer who want to buy and redevelop the estate.
If a big real estate company from a oil-riched country in the middle east is willing to pay any high price requested for it, the owners of teresa ville will be getting more money on their unit, too.
If big developers could advertise their high-end flats in overseas countries, so could you, too.
Big local developers set high psf price on their new units.
The only way for them to seek out enough of those who can pay for their "high" psf prices of their new untis, is to advertise overseas to attract wealthy customers.
So, likwise, we can also advertise to get the deep-pocket investors who are willing to invest jointly with local developer or on their own.
This is the only way of raising the enbloc price on your estate.
This will also raise the bidding price on the enbloc bidding process.
Currently there are often always the same handful few biding the enbloc process.
There are capitaland, Guocoland, CDL, Hong leong, HPL, Simon Cheong Global and a few other small players.
In theory, they could "control" the enboc prices if they want to do it.
In theory, they can also "cartel" the setting of offer price on the enbloc estate.
An international bidding price will raise more biddings. It can raise higher enbloc price for it, too.
A high purchasing power of the developer from a cash-rich international consortium will also mean that they are willing to redevelop the estate into a high quality super-luxury condominium that super-rich people can buy.
Richie
24 July 2007
Not a resident.
Developer will only bid in expression of interest if the CSA has at least 70% signatures. Than after they express their interest , if I am not wrong, you are given two weeks to get the other 10% so as to get the deal to go through, like The Grangeford .
No developer will express the interest if you do not have the majority support for the enbloc sales, unless it is a very GREEN developer. For a size like Teresa Ville, no GREEN developer could afford to bid for it.
There is no need to follow what developers want in having 70% of residents' approval first before they would put a bid on expression of interest.
The rules can be set by the owners. The land belongs to the owners and so it is owners who wil decide the rules of the sales process.
The problem in Singapore is that most Singaporeans like to be dictated by the ways the people to run for them.
For instnace, if their enbloc lawyers take all th interst on the money paid by the developer, they just kept quiet about it. This is because their lawyers said to them it was like this way, lah!.
They have forgotten that the rules of the "game" is set by themselves for their real estate agent and lawyers to follow up in an enbloc sales.
Lawyers and agents are your employees. You pay them tons of money for their enbloc services and transaction process.
So you listen to them, but you instruct them the rules to follow up.
You can also tell them the rules of the "game" that the interests in their bank account for our money held by them paid by the developer is to be paid to residents only.
You can also insist that the enbloc money paid by the developer should be paid into a encrow account of a bank in the name of the enbloc residents.
The enbloc should not be paid into the law firm's bank account. There is a potential flight risk if the law firm decided to close their bank account and take the money on flight.
In short, the residents should be the persons setting out the instructions to the lawyer of the real estate agent that was appointed by the residents to enbloc their estate.
So,in fact the residents of the estate should employ a lawyer to represent them; to take instructions from them; to monitor for them, to read and interpret fr them, and to write instuction to the real estate agent and to supervise their work.
This what rsidents of Farrer court did. They employ a law firm to communicate for them and to their watch over their case.
Their lawyer is the mouth piece of the residents - taking instructions from them; advising and rewiewing all the terms for them when the estate agent and their lawyer preside their selling ideas to them and the ensuing process of the enbloc if is materialised and sold.
By this way the residents will not
be blinded by the many management council members and pro-tem sales commitees who may give "half-baked" answers and interpretation and explanations of documents and so on.
Cheers,
Viva Sera
Dont worry about whether there are Green-horn developer willing to bid by "expression of interest" without the 80% residents approval.
An expression of interst is by still a "expression of interest".
There is no doubt the collective views of the residents' approval have to be sought first.
But there is not need to go through the voting process when there was no intention to formalise a sale through an "expression of interest".
If developers are not interested with it - without the 80% residents' approval of it, so be it.
Theere will be many more develoeprs who are willling to come in to bid for it.
Developers know that the profit is hugh in redeveloping a enbloc estate.
In some new condo in prime areas, the price psf is $2000 psf more than the $1000 psf which they paid for the enbloc of it. In other words, the sale price is three fold.
Let put it another way, if local developers are not interested with it, maybe we should contact Donald Trump instead.
There is no doubt Donald Trump would be very interested in making a hugh enbloc offering on Teresa Ville.
Singapore is only 700 Km2 or 260 sq miles of land space.
And Singapore will be like New York soon. So, it makes prime dollars and cents to him.
We should ask Donald Trump to come to Singapore to bid for it.
He will probably be happy to help attract international high-powered equity investors to bid for it.
He can also bring along top real estate developers to pump up the enbloc price not only of Teresa Ville but also other estates, too.
If we try asking Donald Trump for it, we stand to get a 50:50 chance of getting a reply from him to bid for it.
If we dont try asking him for it, it will be a "total opportunity loss" from it.
At the least, if he declines it, it still makes news of it, and this makes the enbloc bid on teresa ville to rise further for it.
Cheers.
Trump-Up
Tenant of block 1006. #2X-0X
to richie,
the danger with an 'international developer' buying land is clearly the risk involved in dealing with someone who may not be subject to local regulations, especially those that may protect the sale. That's why local/international tie-ups are increasingly common nowadays - local developer, foreign funds (capital venture etc). I think I read previously that banks are now balking at loaning to developers the large amounts required to buy large plots of land, and hence the need for foreign funds. Exchange rates make it favourable for foreign funds to enter the market, but what happens if they pull out for various reasons (bubble bursts, market crashes, internal factors)? It'll seriously affect those owners who might have thought it'd be smooth sailing once a tender is accepted and bought a new home, only to find that the proceeds are not forthcoming.
It's a complicated issue, admittedly.
Published July 24, 2007
Fast track for en bloc deals
By ARTHUR SIM
CREDO Real Estate will market two prime properties for collective sale through expression-of-interest (EOI) exercises - and it could just prove to be the faster way to get a sale done.
Each of the properties - The Hillpark off Dunearn Road and Chateau Eliza at Mount Elizabeth - has less than 80 per cent of owners' approval for sale at the indicative prices, so the process of a collective sale cannot officially proceed.
However, by launching an EOI exercise, owners who are undecided may be swayed by bids from interested developers, even though the bids will not be legally binding offers.
But as Credo's managing director Karamjit Singh notes: 'It can be faster because you can secure a bid at an earlier threshold.'
The Hillpark sits on 77,646 sq ft of land and is zoned for two-storey bungalows. The indicative asking price is $106 million to $110 million, which works out at $1,365 to $1,416 per square foot.
Chateau Eliza sits on a 17,997 sq ft site and has a designated plot ratio of 2.8. The height limit is 36 storeys and the indicative price is $120 million or $2,223 per square foot per plot ratio.
Both developments have achieved around 70 per cent of owners' approval for collective sale, an important consideration when proceeding with an EOI.
Giving an idea of how EOI can work, Credo's executive director Tan Hong Boon revealed that for a recent collective sale deal it brokered through an EOI - Watten Heights off Dunearn Road - Credo received 16 bids.
One was high enough to convince undecided owners to agree to sell quickly.
An Offer to Purchase was then drawn up with the highest bidder and the collective sale was done within days, without having to proceed with a public tender.
http://www.businesstimes.com.sg/sub/suite/story/0,4574,242204,00.html?
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