Independent Observations/ Reflections of a fellow SP who attended EOGM on October 15, 2017

Independent Observations/ Reflections of a fellow SP who attended EOGM on October 15, 2017

Agenda & Presentation: A marked improvement compared to the first EOGM. Meeting agenda was sharp with less ambiguity. Fellow SP and one of the CSC members who presented the slides to explain the flow of decision making for zeroing on the short list did a good job, despite the slides being busy with lots of figures and text. Well done.  

The Shortlist: It was disappointing to see that none of the top property firms made to the short list. As per CSC, they invited 11 property firms to present their candidature but only 5 responded. It was not clear which 5 firms responded, but it was clear that bigger firms chose not to respond.

It was intriguing as to why there was no interest of big property firms in a rare freehold good location property like Teresa Ville?  There may be factors like unavailability of resources etc. in some firms, but absence of all big names in shortlist certainly arises curiosity. Wonder if the reason could be that large property firms have better intelligence and information with regard to the odds of succeeding in en-bloc sales and they thought it would be an uphill task in case of Teresa Ville? Could possible high owner occupancy in a structurally strong building be one of such reasons? Let SPs make their own assumptions.

Discussion on Selection of Marketing Agent : CSC presented few figures as provided by the two shortlisted candidates but primary focus was to make a decision based on two numbers viz. Estimated Reserve Price and their Fee structure.  As forewarned in one of the flyers received in mail recently, with only basic information provided by two relatively smaller property firms, CSC asked SPs to vote and chose one of them then and there. 

A few SPs expressed their concern as to why CSC did not share information on shortlisted candidates well in advance so that SPs could do their own research and ask relevant questions, since it involved securing the sale for a huge sum. It was even more crucial as the short listed companies were not among well known names. One of the SPs argued that even for a less important matter like choosing the external colour of the building, enough time was given by MC for SPs to select one from the shortlist. Response given by secretary of CSC was not convincing that the information provided by 5 respondents was confidential. Wonder how can a proposal which was meant to be shared with SPs at some stage can be marked ‘confidential’.  If not all details, CSC could have at least provided names of the respondents and shortlisted candidates well in advance. Response from the Chairman was  also not to the point, who started explaining the time line of tender process instead. One of the SPs shared that despite their written request to CSC to provide information about shortlisted candidates, CSC did not respond. Isn’t it fair and rightful expectation of SPs to get a response to their queries from CSC?. Hopefully CSC shall not ignore SPs mails in future.

There was also a suggestion that since SPs needed more time to digest quite a few figures and inputs provided by lesser known short listed candidates, can SPs have an option not to vote for either of the shortlisted candidates. There was no response from CSC representatives. Instead one of the SPs (same SP who nominated 7 candidates for CSC in first EOGM, which had made quite a few SPs uncomfortable), responded in loud and seemingly sarcastic manner discouraging SPs to ask questions and labelling them as resisting en-bloc process. While he could get applause from some of the SPs, it certainly was one of the low points of the meeting. It is expected that CSC chairman must not encourage such behaviour in next meetings.  Suggestions from SPs, however diverse or direct, should finally help refining the process.

Discussion on Selection of Legal Consultants: This part of meeting went thru much smoothly as both shortlisted candidates were well known names.

Conclusion: Since now marketing agent and legal consultant are chosen, en-bloc process is expected to pick up speed. Next milestone in next EOGM shall be to decide on minimum reserve price and apportionment method. While SPs are expected to do their own research and calculation as to what is acceptable to them on both points, it is to be noted that both selected agents have accepted “No Sale No Fee” approach. That means, their main agenda is likely to ensure that the sale materializes, so that they can secure their fee. Pushing for highest possible value for SPs (above minimum reserve price) is likely to be their secondary agenda, even though it shall increase their fee. It is easy to assume that lesser the value, easier shall be the find a buyer. SPs must watch for the signals if marketing agents do not seem to make extra efforts and try to convince SPs to accept lower price, just to ensure they get their fee. There are many insightful articles posted by fellow SPs on the blog www.teresavilleowners.com, which should also help in making a judgement. Teresa Ville is a rare Freehold property located next to famous land marks of Singapore. En-Bloc of this property deserves  even closer attention to all aspects.