Collective sales remain a relevant option for property owners to exit from their ageing assets and for developers to replenish their development pipeline, despite the current standstill in the en bloc market, says Colliers International.
But an expectation gap, as described by Colliers in a white paper issued this month, is continuing to impede en bloc deals.
Sellers who are still hoping to strike rich overnight through an en bloc do not seem to have awoken to the new market reality. Developers, on the other hand, are looking for a higher risk discount now to mitigate the headwinds in property development given the softening market.
“It is inconceivable that buyers (developers and landlords) are going to pay anywhere close to outrageous sums for development land, unless it makes economic sense,” said Chia Siew Chuin, Colliers director for research and consultancy.