Tembusu Grand’s site was acquired via GLS but how does it differ from an en bloc sale?
The real estate industry in Singapore has witnessed two popular methods of property sale: government land sales by Urban Redevelopment Authority (URA) and en bloc sales. Tembusu Grand’s land at Jalan Tembusu was notably acquired via GLS in 2021. While both methods involve the sale of land and property, there are significant differences between the two.
Government land sales refer to the sale of land by the government to private developers, typically initated by URA. This method is typically used to generate revenue for the government and to facilitate the development of new properties. Government land sales often involve bidding, where developers submit their proposals and bid prices. The highest bidder usually wins the right to develop the land, subject to various conditions and regulations. In the case for Tembusu Grand, Singapore’s most decorated developer CDL came up with the highest bid.
On the other hand, en bloc sales refer to the collective sale of a property by its owners to a developer. This method is often used for older properties that are in need of renovation or redevelopment. En bloc sales involve negotiations between the owners and the developer, with the latter offering a price that is typically higher than the individual property values.
One of the main advantages of government land sales is that they are typically more transparent and regulated. The bidding process is usually open to all interested parties, and the winner is determined based on objective criteria such as price and development plans. This helps to ensure that the sale is fair and that the government receives a reasonable price for the land.
En bloc sales, on the other hand, can be more complicated and subjective. The owners of the property must agree to sell, and the sale price is often negotiated between the owners and the developer. This can result in disputes and disagreements, particularly if some owners are not willing to sell or if they disagree on the sale price.
Another advantage of government land sales is that they often result in the development of new properties that are needed to meet the demand for housing or commercial space. Singapore government can also set conditions and regulations for the development, such as minimum standards for building quality and sustainability.
En bloc sales, on the other hand, often result in the redevelopment of existing properties, which can help to preserve heritage and historical buildings. However, there is a risk that the new development may not be in keeping with the character of the area or may not meet the needs of the local community.
In terms of the financial benefits, both government land sales and en bloc sales can be profitable for developers. However, en bloc sales may offer a higher potential return on investment, as the developer is able to acquire a larger piece of land at a lower cost per square foot.
In conclusion, both government land sales and en bloc sales have their advantages and disadvantages. Government land sales such as the one for Tembusu Grand offer transparency and regulation, while en bloc sales can be more profitable and can help to preserve heritage buildings. Ultimately, the choice of method will depend on the specific circumstances of the property and the needs of the local community.