Multi-storey car park at Textile Centre in Jalan Sultan on the market for S$36 million

A multi-storey car park in Textile Centre, an ageing mixed development at the corner of Jalan Sultan and North Bridge Road, has been put up for sale with a guide price of S$36 million.

The price is for a 685-lot car park (the biggest strata-titled car park in district 7, according to the property’s marketing agent) as well as a 4,838 sq ft adjacent plot of land that is used as the car park’s driveway and for the loading and unloading area in the development.

Both the car park and adjacent plot are owned by Plaza Development (Pte) Limited, wholly owned by Chee Tat Holdings (S) Pte Ltd, which in turn is controlled by the Ng family which also owns Serene Centre in Bukit Timah.

Plaza Development developed Textile Centre, which was completed in 1977. The company is now left with the carpark component and a few office units in the development, having sold strata units for the rest of the project over the years.

The 25-storey property comprises a seven-storey retail podium block (with the adjoining multi-storey car park), six levels of offices, and 12 floors of 132 apartments.

The site on which Textile Centre stands as well as the adjacent plot have 99-year leasehold tenures starting from June 1970, leaving a balance term of about 46 years. Both sites are zoned for commercial use under the Urban Redevelopment Authority’s current Master Plan.

Plaza Development has appointed JLL as the exclusive marketing agent for the sale of the carpark and the adjacent plot via private treaty. Terry Wong, senior director of capital markets at JLL, said: “Taking into consideration that the plot is estimated to be worth about S$4 million (or S$826 per square foot on land area), the car park will be priced at S$32 million, reflecting about S$46,715 per lot or S$160 psf on strata area.”

The car park’s strata area of 200,456 sq ft represents about 30 per cent of the total strata area of Textile Centre.

The building used to be one of Singapore’s main textile and fabric wholesale and distribution centres. While many of the textile retailers have since moved out, new tenants such as coffee joints, eateries, banks, nightclubs, and a church have taken residence within the mall.

Highly sought-after asset class

“Today, there are few strata-titled car parks in Singapore as communal car parks within a development are no longer allowed separate strata titles. As a result, strata-titled car parks have become very limited in supply and are infrequently put up for sale,” said Wong.

He said the most comparable recent strata car park transaction would be the S$39.33 million sale in 2021 at People’s Park Complex, with 648 car park lots together with a food and beverage (F&B) unit. This translated to about S$54,059 per car park lot or S$195 psf based on the 182,340 sq ft strata area for the car park space, and S$1,533 psf for the 2,809 sq ft F&B unit. At the time, the site had a balance lease term of 46 years.

Wong noted that strata car parks are highly sought after, given their relatively low maintenance cost and stable recurring cash flow - presenting an attractive alternative to traditional real estate asset classes such as residential and commercial properties. Based on JLL’s projections, the car park lots at Textile Centre should be able to fetch an annual revenue of about S$1.625 million, which would reflect a gross yield of 4.5 per cent on the S$36 million guide price.

“While the car park has self-sustaining demand from Textile Centre’s occupants and visitors, there is also strong spillover demand from surrounding buildings and amenities. It is a convenient place for motorists to park their vehicles when visiting Kampong Glam or nearby developments,” said Wong.

Textile Centre’s car park is currently managed by third-party car park operator Mack Parking. There is potential for an incoming buyer to operate the car park itself, after Mack’s contract expires around the middle of next year.

Unlocking further value

There is also scope to unlock further value for the asset by converting surplus car park spaces to higher-value uses, JLL said.

Said Wong: “Car parks in existing developments that are within 400-metre radius from a rapid transit system station, such as Textile Centre, are now allowed to have reduced parking provisions.” This follows the Land Transport Authority’s (LTA) introduction of revised benchmarks to give greater flexibility in managing parking provisions via the Range-based Parking Provision Standards, effective Feb 1, 2019.

Textile Centre’s car park has a surplus of about 378 lots, said Wong. These lots could potentially be converted to higher-value uses such as restaurants, self-storage facilities, e-commerce operations and charging stations, subject to approval from the relevant authorities.