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Norman Ho, a senior partner at Rajah & Tann Singapore, has observed that the steep residential Additional Buyer’s Stamp Duty (ABSD) rate imposed on foreign owners and the higher housing replacement costs faced by locals have made it extremely difficult for the collective sales committee of ageing properties to convince fellow owners to attempt a collective sale.

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Ho notes that in the past two years, most successful collective sale deals involved non-residential or mixed-use developments. However, enthusiasm among developers for residential collective sales has significantly decreased due to the 40% ABSD on land purchased for residential redevelopment.

According to Ho, lawyers, consultants, developers, and the government will closely monitor future residential collective sales to further refine the legal process. He hopes that this will result in a more balanced approach that supports urban redevelopment while also protecting the rights of individual owners.

At the 32nd Pan Pacific Congress on October 1, Ho shared his insights on Singapore’s collective sale process and the impact of court decisions. The international conference, organized by the Singapore Institute of Surveyors and Valuers (SISV), spanned three days from September 29th to October 2nd.

Ho notes that Singapore’s collective sale framework has been shaped by landmark cases brought before the High Court and the Strata Titles Board. These court decisions have helped clarify the responsibilities of sale committees and the expected standards of fairness in these transactions.

For instance, the Court of Appeal overturned an attempted sale of Horizon Towers, a 99-year leasehold condo on Leonie Hill Road, in 2009 due to findings of an improperly handled sales process. This case emphasized that members of a collective sale committee owe fiduciary duties to subsidiary proprietors, including the duty to avoid conflicts of interest and disclose material information.

Subsequent cases have also refined other issues in the collective sale process, such as contractual flexibility in collective sale agreements, the method of apportionment, and incentive payments.

Ho notes that recent cases demonstrate that the courts are not solely concerned with procedural requirements, but also with how decisions are made and whether owners are treated fairly. He calls on all parties to be transparent and work together in good faith.

Eugene Lim, founder and CEO of The Assembly Place (TAP), also shared his company’s evolution in tandem with Singapore’s co-living market. Today, TAP is an established long-term lodging operator in Singapore with over 4,000 rooms across 145 locations. This is a significant increase from just six rooms in 2019, with an average occupancy rate of 95% across the portfolio.

The company manages seven lodging brands in Singapore, including traditional co-living options such as TAP Lite, TAP Home, and TAP Lux, as well as student accommodation, homestay, intergenerational co-living, and boutique hotels.

Lim says that TAP has successfully repositioned many ageing assets, such as shophouses and older apartment buildings, into high-yield and capital-appreciating properties, thanks to its close collaboration with family offices and high-net-worth individuals who have inherited these assets.

TAP will soon unveil properties such as the renovated Serene Centre, which the company will manage after it was sold for $105 million to Apricot Capital last year. Additionally, TAP will manage a new serviced apartment at 400 River Valley Road, which was acquired by a Singapore family office for $56 million in February.

In addition to these developments, Lim plans to expand his hospitality offerings with a new capsule hotel concept, Gather House, at 63/65 South Bridge Road in Boat Quay. The four-storey location will include F&B and co-working on the first floor, with a 160-bed capsule hotel on the upper floors. The hotel is expected to open in November.

Overall, the conference delegates were provided with valuable insights on the Singapore collective sale process and the evolving co-living market from industry experts.