Mega deals move some smaller firms and new entrants into new league
THE collective sale euphoria this year has swept in windfalls not only for home sellers, but also for the companies that brokered the sales.
Most property consultancies in Singapore have logged their best-ever year for such deals, pocketing record sums in related fees.
The run of 'mega deals' has also catapulted smaller property firms into the same league as the big boys.
Credo Real Estate, for instance, shot to the top of the pack this year by landing the $1.34 billion sale of Farrer Court in Farrer Road.
The local firm, started in 2002, specialises in collective sales. Bigger players like DTZ Debenham Tie Leung and Knight Frank also handle areas such as investment sales and office leasing.
In all, Credo sold $2.17 billion worth of collective sale sites this year. That is 20 per cent more than the next best performer: DTZ with $1.8 billion.
But DTZ also turned in a record year, said Mr Shaun Poh, the consultancy's director of investments and auctions. 'In terms of fee income, it was a fantastic year for us, the best year so far.'
The consultancies all declined to reveal how much they had earned from collective sales this year, but Mr Poh helped shed some light.
For smaller projects that sell for less than $50 million, most firms charge 0.75 per cent to 1 per cent of the sale price, he said. Bigger projects worth at least $300 million bring in about 0.5 per cent.
Some firms impose extra charges if they find buyers willing to go well above the reserve price, Mr Poh added.
In third place was Savills Singapore, another relatively new entrant to this segment. It only 'really got into the business last year', said investment sales director Steven Ming. It more than doubled last year's sales with deals such as Tulip Gardens and Westwood Apartments.
Next came Knight Frank, which also had a 'record year', with 10 deals totalling $1.2 billion, said investment sales head Foo Suan Peng.
Heavyweight CB Richard Ellis, last year's number one, weighed in at fifth place with four deals, including the $625 million sale of Grangeford Apartments.
Knight Frank's Mr Foo said the collective sales market had never been so active. He noted: 'All kinds of records were broken: sale price per sq ft, sale price quantum, number of transactions, size of development.'
This stellar performance also prompted agencies 'not traditionally in this market' to try their luck, he added.
Newman & Goh, which started marketing collective sale sites only in October 2005, was able to gain a solid foothold. 'It was a great year,' said investment sales head Jeffrey Goh.
Even agencies better known for individual home sales, such as Dennis Wee Group and Ivy Lee Realty, jumped on the bandwagon.
Dennis Wee helped to sell Tampines Court for $405 million, while Ivy Lee brokered the $131.5 million sale of Hong Leong Gardens in the West Coast. Both deals were done in March.
But even in the midst of popping the champagne, the consultants agree next year's outlook is rather less rosy.
Continuing concerns over the United States sub-prime mortgage crisis might discourage buyers, while a new set of collective sale rules could obstruct the path for sellers.
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