(Bloomberg) -- Shareholders of Singapore developers have another reason to rejoice: en-bloc sales are at a ten-year high, according to some estimates.
A spate of en-bloc sales this week, or redevelopment deals in which a group of owners band together to sell apartment blocks at a hefty premium, has buoyed market sentiment that the property sector is poised for a rebound. Chinese developer Kingsford Huray Development on Thursday announced the S$830.1 million ($607 million) purchase of Normanton Park, a 488-unit apartment complex, while City Developments Ltd.'s joint venture acquired Amber Park for S$906.7 million.
Bullish investors pushed shares of UOL Group Ltd. up as much as 4.3 percent to a record high on Friday, making it the best performing stock on Singapore's benchmark gauge. City Developments Ltd. rose as much as 2.4 percent.
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According to OCBC, en-bloc sales have totaled more than S$5 billion this year, which is the highest since 2007. The previous peak saw an annual figure of S$11.5 billion.
“The market recognizes that en-blocs themselves exert powerful trickle-down effects on demand and supply,” Eli Lee, a senior investment analyst at OCBC Investment Research said in an email. The physical stock of homes available for occupancy falls when collective sales take place and those who sold their homes often enter the property market rapidly with new cash and borrowing headroom, he said.
Home prices rose for the first time in four years in the three months ended Sept. 30 from the previous quarter, snapping a record run of declines.
To contact the reporter on this story: Livia Yap in Singapore at lyap14@bloomberg.net.
To contact the editors responsible for this story: Divya Balji at dbalji1@bloomberg.net, Sree Vidya Bhaktavatsalam
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