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More commercial sites hop onto collective sale train

Singapore Shopping Centre, Realty Centre inititiate moves to go en bloc; Verdun House launched at S$60m. Tender for three earlier projects closed without deal

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Singapore Shopping Centre at Clemenceau Avenue has only 29 years left on its tenure. Redas secretariat is located in the building.

Singapore

MORE commercial developments are jumping onto the collective sale bandwagon even as the success rate for such deals pale in comparison to residential developments.

Among them is Singapore Shopping Centre at Clemenceau Avenue, which has only 29 years left on its tenure and where the secretariat of Real Estate Developers' Association of Singapore (Redas) is located.

Redas, which owns 5,264 sq ft of space at the top floor of Singapore Shopping Centre (including 2,390 sq ft of roof terrace) since 1987 under a trust, is not part of the collective sale committee (CSC).

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The actual reserve price and apportionment method will be determined at the next extraordinary general meeting after the valuation report is out, said CSC chairman John Lee (see amendment note).

For now, the reserve price for the retail-cum-office development near Dhoby Ghaut MRT station is expected to be around S$250 million, according to its marketing agent Cushman & Wakefield. The project occupies 2,449.8 sq m of land area zoned "commercial" with a plot ratio of 4.2+.

Elsewhere in Tanjong Pagar, owners of freehold Realty Centre have also appointed Cushman & Wakefield as marketing agent.

Realty Centre sits on a land plot of 1,021.9 sq m zoned "commercial" with a plot ratio of 5.6. No indicative reserve price has been set yet.

Both Singapore Shopping Centre and Realty Centre are still in the midst of confirming their maximum gross floor areas with the authorities.

But so far this year, there has been no commercial collective sale sites sold, with all 14 collective sale sites sold being residential developments.

The public tenders of ICB Shopping Centre, Jalan Besar Plaza and Chinatown Plaza have closed without a sale being concluded.

En bloc sale brokers told The Business Times that the pricing for commercial sites and the location are two very critical success factors.

Mixed-use sites with a retail component are harder to sell given that the strata retail segment is struggling. In the case of residential-cum-commercial sites, the commercial component can blow the reserve price out of the realistic range, one broker said.

Owners at Goldhill Centre and Katong Shopping Centre, which houses offices and shops, have set their reserve prices at S$425 million and S$580 million respectively, said Christina Sim, director of capital markets at Cushman & Wakefield.

This works out to about S$2,600 psf ppr (with development charge) for Goldhill Centre and S$2,100 psf ppr (without development charge) for Katong Shopping Centre, she said.

Other commercial projects at varying stages of the collective sale process include People's Park Centre, People's Park Complex, Golden Mile Tower, Golden Mile Complex, Golden Wall Centre, Tanglin Shopping Centre and Sim Lim Square.

On Wednesday, Singapore Realtors Inc (SRI) launched the collective sale of Verdun House, a commercial site near Farrer Park MRT station that now consists of four shops and 12 apartments. Its tender will close on April 18.

Owners at Verdun House are asking for S$60 million, which translates to S$2,100 psf ppr. They are seeking clarification from the authorities on the development baseline of their development.

A new development on the 7,316 sq ft site could potentially accommodate total GFA of about 30,728 sq ft. It can be configured into 50 commercial units with an average size of 550 sq ft each, subject to approval.

SRI head of investment sales Andy Gan said that the threshold 80 per cent consensus level was achieved in one sitting, which is highly uncommon for a mixed-use development.

Separately, Knight Frank launched on Wednesday the sale of a freehold commercial building along Joo Chiat Road, which is owned by a single owner, by expression of interest.

The indicative price of S$18-20 million works out to S$969-1,077 psf over the gross floor area.

Amendment Note: The story is revised to correct the surname of Singapore Shopping Centre CSC chairman John Lee

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