RHTLaw Taylor Wessing’s Managing Partner Tan Chong Huat shared his views in this week’s topic in the Business Times’ weekly column, Views from the Top. This article was first published in The Business Times on 28 November 2016. 'Truth' in the eyes of the beholder NOV 28, 2016 5:50 AM THIS WEEK'S TOPIC: How should government and society respond to the seeming rise of a post-truth public? Tan Chong Huat Managing Partner RHTLaw Taylor Wessing LLP Singapore will not be spared the post-truth politics that Donald Trump and Brexit exploited. As the globalisation wave strikes nearly every corner of the world and as disruptive technology makes today's jobs irrelevant tomorrow, politicians will find ways to feed off the hunger and the anger of voters. In fact, Singapore saw shades of post-truth politics in the last presidential elections when two candidates promised a pie-in-the-sky dream. There was an immediate government and media pushback and the two were humiliated at the polls. There is a third weapon: society. It has to be inoculated against possible scheming charlatans as an engaged, educated and enlightened citizenry is the only antidote to poisoned politics. Another observation relates to any false news in the media which requires strict enforcement without fear or favour.
RHTLaw Taylor Wessing’s Deputy Head of Real Estate Practice Sandra Han was quoted in The Edge Property article titled “Collective sales sputtering back to life”. The article was first published in The Edge Property on 11 November 2016. Collective sales sputtering back to life Source: The Edge Property Date: 11 November 2016 Author: Cecilia Chow After a two-year drought with zero sales in 2014 and the lone en bloc deal of Thong Sia Building last year, the recent three deals topping $1 billion foreshadow an awakening of the collective sale market. “Based on a three-year snapshot, naturally $1 billion sounds like a lot,” says Karamjit Singh, JLL’s international director and head of residential. “But when compared with the preceding four years — from 2010 to 2013 — during which collective sales averaged $1.9 billion a year, it’s still low.” (See chart.) Singh attributes the recent collective sale deals to a confluence of factors: developers’ outlook having turned more positive as projects launched recently have sold reasonably well; inventory of unsold units has been reduced, spurring developers’ need to replenish their land bank; and reduced supply of development land available under the government land sales (GLS) programme since 2H2015, prompting developers to turn to collective sale sites as an alternative. JLL brokered the sale of Thong Sia Building for $380 million in July last year; it marked the largest collective sale of a mixed-use development to date. The project is located just off prime Orchard Road, opposite Paragon shopping centre. This year, JLL brokered two of the three collective sale deals: The 358-unit Shunfu Ville sold to mainland Chinese developer Qingjian Realty for $638 million in May, and the 175-unit Raintree Gardens at Potong Pasir sold to a joint venture (JV) between Singapore-listed developers UOL Group and sister company United Industrial Corp for $334.2 million in October. The third sale this year was Harbour View Gardens in Pasir Panjang, a freehold 14-unit apartment block purchased by Singapore-listed property group Roxy-Pacific Holdings for $33.25 million at end-August. These successful deals have spurred owners of other ageing private condominiums to revisit the collective sale route. “Many owners are asking if this is a good time to embark on a collective sale process,” says Singh. Owners sitting on a goldmine? Other property consultants have also been receiving similar calls. “These are mainly from hopeful owners wondering if the boom times have returned, and whether they are sitting on a goldmine,” says Jeremy Lake, CBRE executive director of investment properties. The enquires straddle all segments — privatised HUDC estates, older leasehold private condos, and some of the old private freehold projects that may have been unsuccessful in the past and are now looking to revive the collective sale process, Lake adds. Even lawyers have been besieged by phone calls. After representing the buyers in the collective sale of Shunfu Ville and Raintree Gardens, Lee Liat Yeang, senior partner of real estate practice group at Dentons Rodyk & Davidson, says he has received many enquiries from developers. Most of their concerns revolve around the issue of lease top-up and the likelihood of obtaining approval at the High Court or Strata Titles Board (STB) stage, Lee observes. Shunfu Ville, a privatised HUDC estate, has 69 years left on its lease. Therefore, part of the purchase price of $638 million includes a differential premium payable to the state to top up the lease for another 99 years and intensify the land use. Based on the site’s land area of 408,927 sq ft and gross plot ratio of 2.8, the new development can potentially yield over 1,100 units of an average size of 1,000 sq ft. JLL has estimated a breakeven price of $1,250 psf, with selling prices in the range of $1,400 to $1,500 psf. Qingjian had hoped to build towers of 30 to 36 storeys, but was told by URA to stick to the height limit of 21 to 23 storeys for the new project, according to news reports last month. This means the residential blocks will be lower and stouter. That could affect the premium it could otherwise command for high floor units with unblocked views, property observers say. Obstacles part of collective sale process Although 82% of the owners at Shunfu Ville had agreed to the collective sale, there were five who raised objections. After two mediation sessions failed, the STB issued a stop order to the collective sales committee, which has since applied to the High Court to seek approval for the sale. Shunfu Ville marks Qingjian Realty’s first en bloc purchase after eight years as a developer in Singapore. “We will await the final outcome of the [en bloc] purchase,” says Li Jun, managing director of Qingjian Realty (South Pacific) Group in response to email queries from The Edge Singapore. “We will definitely want to maximise the plot ratio, within the scope of the URA guidelines, when it is time to embark on the design. “Whatever the outcome, Qingjian Realty remains committed to building homes that are relevant to, and complement, the lifestyles of our homeowners,” says Li. At $638 million, each of the 358 owners at Shunfu Ville will walk away with an average of $1.782 million — which is almost 50% higher than the price an individual unit could command in the resale market, says JLL. And this is despite the fact that the sale price is below the reserve price of $688 million. For Raintree Gardens, the sale price of $334.2 million reflects a land cost of $797 psf per plot ratio on the potential gross floor area, inclusive of a differential premium payable to the state to top up the lease and for a redevelopment of the site to a gross plot ratio of 2.8. Raintree Gardens is also a privatised HUDC estate, with 70 years left on its existing lease. If the sale is successful, each apartment owner at Raintree Gardens will get an average of $1.9 million. The sale is subject to several conditions, including an order of sale by the STB or High Court. Minority owner objections throw spanner in the works “For bigger developments,
RHTLaw Taylor Wessing’s Managing Partner Tan Chong Huat shared his views in this week’s topic in the Business Times’ weekly column, Views from the Top. This article was first published in The Business Times on 7 November 2016. Robots and gigs: the future of work NOV 7, 2016 5:50 AM THIS WEEK'S TOPIC: How will automation and the rise of the gig economy change the nature of work? Tan Chong Huat Managing Partner RHT Law Taylor Wessing LLP MORE developed economies have leveraged the gig model longer than we can imagine. Technology, cost and attitudes are probably the biggest driver of the gig economy today. Technology has created sustainable revenue streams for freelancers. Uberisation of the economy will see more freelancers undertaking work traditionally done by employees. The rise of Artificial Intelligence (AI) is already changing the game. The gig economy reduces costs. The changing attitude of the younger workforce where flexibility is a priority is also changing the landscape. Employers are attracted to the gig economy as freelancers do not have employee benefits. This has changed for UK Uber drivers but this trend will continue especially with shrinking margins. Change is inevitable and the gig economy is likely to stay its course in this market.