In Singapore, an "en-bloc sale" or "collective sale" has achieved great rewards for many home owners. Such a sale essentially hinges on a couple of criteria;
Location of the project
Age of the project
Current configuration & size of the project
Proposed size of new project
Price sentiments (of both the current owners and potential developers)
The location of a project determines, in the first place, whether developers will be interested in getting this plot of land for re-development. Most developers are interested in the Prime Locations - Districts 09, 10, 11 & 21. For sub-urban locations, the projects nearer to public amenities will be able to draw in better response.
Age of a project is also important. If the project is less than 10 years old, at least 90% of current home owners must agree to the Collective Sale. Otherwise, only 80% compliance is necessary for the en-bloc to proceed. Most projects that will have potential for en-bloc are those which have been left "as-is" and no refurbishment works done on the common property. The rental value fetched by the owners are no longer attractive for its sale price and maintenance cost is becoming a headache for the owners.
The current configuration and size of the project determines how the eventual Sales Proceeds from the en-bloc sale will be distributed (or rather "how thinly and in what way the cake will be sliced"). This is always a major concern among home owners, as individuals will always have different perceptions as to what method's the fairest of them all.
Proposed size of the new project affects the final revenue by the developer. This proposed size is determined by the Land Size x Plot Ratio = Gross Floor Area (aka proposed size).
The larger the proposed size = more units can be built = more revenue for developer = higher bid price for the land = more money for the current home owners
Now, last but not least, property consultants typically make use of past transacted data to formulate Land Value for the project.
A common format used is the Residual Method and this is nothing more than "reverse-accounting" whereby the final sale prices for the developer's newly proposed project is estimated via current home values and taking into account the standard costs such as building costs, financing costs, developer's profit margin, and so on and so forth, until a final value is achieved and that is the Value that the developer can afford to pay for the Land (note! - based on its potential use AND NOT its current use).
So, in summary, if you are a home owner who is thinking of getting your project up for en-bloc, do look at the various criteria before making any formal proceedings.
Even though a successful en-bloc can be a windfall for many, the failure of one can be highly detrimental to the atmosphere within the project, as there will be a clear line of conflict between those who propose and those who oppose.
If you have any queries about (1) how to or (2) whether or not you should give en-bloc a shot, we recommend the services of Phang & Company - one of Singapore's leading en-bloc legal consultants.
They have handled many various types of en-bloc cases and collected a wealth of experience through the years. Notable projects include the site of Cairnhill Crest (highest ever in terms of value worth) and more recently, Paterson Tower and Paterson Lodge (Swap Program).
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