Would your replacement home be anywhere as good as Atria?

We have tried looking around many times. No place can match up to Atria in terms of location, convenience & design.

Property agents will tell you the obvious Atria advantages like Location (yes, we can stroll to the beach, and there are great facilities and schools nearby).

But for those of us already lucky enough to live here, we take for granted the unique advantages of Atria:

1) Exclusive

Where else would you find a single block condo, and only 158 units? New developments have several blocks built close together.

2) Convenience

For drivers:
- bypass any congestion quickly -- escape from the many small roads
- car park is never a problem (unlike most new developments)

For non-drivers:
- many bus (Mountbatten & Fort Road -- you can get to town quickly via ECP or Nicoll Highway
- shuttle buses to Parkway Parade & Leisure Drome
- taxis easily available (unlike on many other roads)

3) Great design

- We never have to wait long for the lifts.
- The internal space is sensible (unlike new fancy and impractical developments).

Why would we sign away such a wonderful place to live?

This is Home, truly.

Do you love Atria? Please drop us a line (or lines) to say why -- does not matter if you are owner or tenant, so long as you love staying here.

What you stand to lose if you sign the current CSA

The real value of your home/asset now - the Residual Land Value

(Applies to both owner/occupier and owner/investor) 

Residual Land Value (RLV) = Gross Development Value (GDV) minus Reasonable Profits (incl. Tax/Fees & Overheads etc.) minus Construction Cost minus Development charges

New Dev. Area of The Atria (DA) = 365949.8sqft @ Plot Ratio 2.8, therefore;

[a] Projected GDV in 3 years' time = $2500psf X (DA)                  = $914.9 mil

[b] Construction Cost = $350 X (DA)                                            = $128.1 mil

[c] Reasonable Profit = 20% X (GDV)                                          = $183.0 mil

[d] Development Charges for The Atria based on current DC rates = $50.3 mil

Hence, RLV of The Atria = $553.5 mil = [a]-[b]-[c]-[d]

Our current CSA Reserve Price = $500 mil. Therefore, we lose $53.5 mil. 

We would also like to point out that, with the excellent state of The Atria and it being a 15year old freehold residential and sea-fronting building, premiums should be added to its Land Value as it can command at least a rental revenue of $10 mil per year, if the developer/buyer decides to Land Bank. This works out to be another $40 mil.

Therefore, $53.5 mil + $40 mil = $93.5 mil which works out to be 18.7% less than what we should receive. 

The current/future potential value of The Atria 

(1) One and only 1.5km long strip of high-rise/high-dense freehold residential in the east, with both sea and city view, in a private residential district with East Coast Park a stone throw away.

(2) Eastern Region Line (MRT) serving from New Downtown to Changi Airport, with locations of the stations to be announced very soon.

(3) Very likely an MRT Station at Katong Park, which is less than 400m away from The Atria. (Recent announcement of stations along DTL3 has caused the values of properties nearby to jump by 20%)

(4) Kallang Sports Hub in construction, completion expected in April 2014.

(5) Planned Kallang Riverside lifestyle precinct, Paya Lebar Commercial Hub and evolving Joo chiat Heritage district all within 2-3km radius.

http://www.iproperty.com.sg/news/1077/Singapore-East-region-development-blueprint

All the above points are huge and solid property value-triggering factors that we believe to push the value of this strip to at least 50% to 80% in 10years' time.

The Atria, being such a young building, with up-to-date condo amenities, good design and excellent building conditions, there are advantages to hold and allow other sites along the Strip to be developed first, than reap the maximum value in 10 years. (From Belvedere to Seafront, to Aalto, each project increased 20% in their average selling price when launched.)

Why should we short-change ourselves by giving away this huge potential gain, which we have invested for, to the developer and en bloc raiders? We firmly believe that it is not the best time to harvest this golden fruit, which is now rightfully ours.

Immature and Unjust current En bloc laws/process 

Even with the recent 2007 and 2010 amendments to the LT(S)A, there are still loopholes in the en bloc process, which can be exploited by speculators, and does not protect the real long-term homes/assets holders.

These can be reflected in the numerous court cases, huge developers' profits and complaints from displaced home- owners of various "successful" collective sales and the inability of getting comparable replacement properties.

Most of the time, these processes translate to Minority Vs Majority, rather than Sellers Vs Buyers, due to the authorities' unclear guidelines, especially in the issue regarding the Methods of Apportionment of Sales Proceeds.

Due to these mismanaged process of en bloc exercises, lack of development knowledge of the CSCs and the conflict of interest of the marketing agents; all owners/sellers, especially Home owners (occupiers who have no other properties)*, are disadvantaged in most incidents.

There are fairer ways this can be explored, for example, in the case of Paterson Lodge en bloc exercise, owners were given the option of 1-for-1 exchanges for their home, requiring no homeowners to be displaced. Further away, in South Korea's Urban Renewal Model (Hapdong Redevelopment), it is legislated in the law, that "en bloc" must only be done in a 1-for-1 manner, to safeguard the homeowners’ interest and to protect the social and cultural capitals of the city.

http://lushhomemedia.wordpress.com/2007/07/19/paterson-lodge%E2%80%99s-answer-to-en-bloc-blues/

* Ordinary homeowners will face financial risk as they will have problem finding a replacement home. They only receive full payment for their units some time after they agree to the sale, given the long drawn out en bloc process. Decisions made by owners about the attractiveness of the sale are invariably based on the cost of comparable replacement properties. But with runaway property prices, they may find their windfall is barely enough to buy a property of similar size and location, leaving little if any profit left over. Furthermore, owners may only block a sale if they can prove financial loss, which is deemed by the Strata Title Board as occurring when the en bloc sale price is lower than the original purchase price, plus stamp duties and legal fees. Owners may not make reference, for example, to the amount of money paid out of their Central Provident Fund accounts towards the purchase of their home, which would include the cost of their home loan. 

Is Atria your only home? Sign the CSA and you only have 2 'No Choice' Options left

You have every right to sell. But, if Atria is the only home for you and your family, what would you have to do between signing the CSA and the final completion?

“No choice” Option 1

Start looking for another home now, and commit to the purchase before you get the en-bloc money.

“No choice” Option 2

You are aware of the above, and choose to wait till the deal is confirmed before committing to another property.

“No choice” Option 1

Start looking for another home now, and commit to the purchase before you get the en-bloc money.

What if the en bloc deal does not go through?

There are real-life examples of this, and genuine home buyers do get caught.

Even if it does, how much would you get?

(No, the projected amount means just that -- projected, that is, not a guarantee).

Again, there are real-life examples.

And, when would you get your money?

In the best case scenario, it could be at least 9 mths. In the worst-case and very realistic scenario, it could be up to 30 mths (ie 2 ½ years or more).

Can you afford the uncertainty, and the wait?

Yes, there is a minimum reserve price. Yes, there would a 3rd-party valuation before the final tender. Yes, the CSC has to call for a meeting to meet all sellers to obtain their approval to lower the Atria sale price, if the valuation or market falls below $500m.

But please note:

a) The minimum reserve price is only a number. The only people to whom this number really matters is you and me, the owners.

“How much” do you think it matters to:

Those hired to work on this, who are paid a percentage of the sale?

The speculators, especially those who may have bought unit(s) specifically to benefit from an en-bloc? (In any en bloc push there are likely to be a few speculators. They choose a “worthwhile to enbloc” unit (or units) carefully, service the mortgage for only a short time, and enjoy the windfall.). Atria is not likely to be a serious home or (only property) for them.

The developer-buyer? Important question. But that would have to be the subject of another post.

b) Valuation is an art, not a science. It is at least partly subjective. And the valuer can be recommended by the agent and appointed by the CSC.

c) If the market or valuation is lower than $500m, and you are already committed to another mortgage, are you really in a position to say “no” a lower reserve price, esp if your new mortgage were based on the $500m “reserve price”?

“No choice” Option 2

You are aware of the above, and choose to wait till the deal is confirmed before committing to another property.

If the market goes up, which means it is more likely that the deal would go through, how much would you have to pay for your replacement home? Even if you were planning to downgrade -- how much would it cost then? how much cash were you counting on in your downgrade sacrifice?

Sent Packing in a hurry?

If the en bloc deal goes through, you have only 7-9 months (Including the 6-month Vacant Possession period) to find somewhere else to live. Time is not on your side-- but finding a property takes time, and having secured it at last, the paperwork would also ake time (not to mention renovations).

And you would not be the only owner displaced by en bloc(s) who is looking, and desperate.

Do you want to be rushed into such an important decision? Once you sign, it is irrevocable and irreversible. Those who have signed will have no rights to raise any objections to STB or High Court. You will have to act on the 2 above “no choice” options and their consequences (except for the 5-day cooling-off period after signing).

Would you let anyone rush you into signing a contract to sell your house without knowing

how much you will get,

and when you will get it?

Do you want to be left with “No choice” and no time, and for the wrong reasons? If you have no time to think through now, when 80% have signed the CSA, you would have even less time.

NOW TIME IS ON YOUR SIDE. YOU STILL HAVE TIME, no matter what anyone tells you.

Please take time to think about these very important and real considerations for you and your family BEFORE you sign. Signing the CSA is irreversible and irrevocable.