Simsville presses pause on planned en bloc sale after new cooling measures

SimsVille Condominium in Singapore’s Geylang neighbourhoodSimsVille Condominium in Singapore’s Geylang neighbourhood; photo taken 23 June 2021

Simsville’s en bloc has been put on ice after the Singapore government introduced a fresh round of cooling measures for the property market, Shenton Wire has learned Wednesday.

An en bloc sale is a collective sale of multiple units of property; in Singapore, when a development is sold en bloc, the buyer usually plans to demolish the existing property and re-develop. The owners are typically paid a sizeable premium in an en bloc sale, but a super majority of at least 80 percent must agree to the sale and later to the purchase price.

A message from the agent for the collective sale, PropNex, which was seen by Shenton Wire, said the extraordinary general meeting (EOGM) and the conditional sales agreement (CSA) signing would be postponed “to a later date.”

“We will re-evaluate the en bloc process and update everyone on the rescheduled date once it’s firmed up,” the message said.

One owner told Shenton Wire Wednesday the delay wasn’t surprising after the latest measures.

The agent for PropNex didn’t immediately return Shenton Wire’s emailed request for comment.

In mid-December, Singapore imposed a fresh package of cooling measures to put the ice on an increasingly active private and public residential property market, citing in part rising interest rates.

The measures included increasing the Additional Buyer’s Stamp Duty (ABSD) rates and changes to loan-to-value limits, particularly for buyers of investment properties.

Private housing prices have risen by around 9 percent since the first quarter of 2020, and Housing and Development Board, or HDB, resale flat prices are up around 15 percent over the same period, while transaction volumes have also been high amid a low interest rate environment, authorities said in the announcement of the measures earlier this month.

The mid-December statement said the measures are intended to dampen broad-based demand, especially for those seeking property for investment rather than owner occupation.

Simsville potential deal size

In October, the reserve price for Simsville’s attempted en bloc sale was estimated at S$859 million to S$901.5 million, based on a land price of S$1,200 to S$1,250 a square foot per plot ratio, according to marketing material seen by Shenton Wire at the time.

Under the proposed reserve price deal, each unit owner would receive S$1,350 to S$1,417 per square foot, the data showed.

SimsVille has 522 units across four towers as well as facilities including pools, tennis courts and other amenities.

Data from Square Foot Research showed the average price range for the past year S$1,086 a square foot, while the implied rental yield was 3.25 percent for the condos; the data showed the historical low for sales at the development was S$315 a square foot in July 2006, indicating some owners may be receiving significantly higher rental yields.

The data indicated nearby comparable condos sold in the secondary market were priced at similar levels as recent transactions at Simsville. The data showed some nearby condos had higher implied rental yields than Simsville.

The average sales price over the November 2020 to November 2021 period rising 7.51 percent per square foot, according to data from property website 99.co.

The residential property, located in Singapore’s Geylang neighborhood, was completed in 1998. It’s uncommon for properties less than 30 years old to successfully complete an en bloc deal in Singapore. SimsVille is a 99-year leasehold property; its countdown started in 1994.