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Sep 26, 2007

REDAS CHIEF ON BRIEF PAUSE

Collective sales ease as new rules take hold

THE market for collective sales has had a spectacular run this year, but new rules are likely to act as a brake to it, Mr Simon Cheong, chief executive of property developer SC Global, said yesterday.

Mr Cheong, who is also chairman of the Real Estate Developers Association Singapore (Redas), said the market is still digesting changes in collective sale legislation passed in Parliament last week.

'In the process of digesting, obviously there will be a pause,' he said.

The new rules, which are likely to kick in next month, will lengthen the collective sale process and likely constrict land supply.

'For us developers, we are already anticipating that it will be more difficult to get choice sites in the near future. If we do, it will be at a higher price,' Mr Cheong said on the sidelines of a Redas lunch yesterday to mark the mid-autumn festival.

In a separate move, a Knight Frank report yesterday forecast a slowdown in collective sales. The property consultancy said developers have been spending $10.22 billion on sites for collective sales since January, more than the $8.08 billion outlay for all of last year.

Activity, however, is already abating, with only 13 deals worth $1.65 billion done in the third quarter. This compared with 27 deals worth $5.24 billion in the second quarter, said Knight Frank.