You are here

CapitaLand acquires historic Pearl Bank in S$728m collective sale

CapitaLand S'pore CEO Ronald Tay said that given where the market is today, there will be a decent profit to be made. Pearl Bank Apartments made headlines as Singapore's first land-sales site launched exclusively for housing development in 1969.


CAPITALAND has snagged the iconic Pearl Bank Apartments in a collective sale for SS$728 million, and plans to redevelop the site into an 800-unit condominium project.

The latest news breaks a hiatus of more than four years during which CapitaLand did not manage to secure a site here as keen bidding by developers for limited land, particularly since last year, jacked up land prices.

More than just a one-off land acquisition, the private treaty sewn up in the wee hours of Tuesday morning kick-starts the group's shoring up of a local residential pipeline amid a market upturn, said president and group CEO Lim Ming Yan.

The last time CapitaLand secured any development land in Singapore was in June 2013 when it bought a government land sale (GLS) site in Bukit Timah, where it is developing landed project Victoria Park Villas.

Your feedback is important to us

Tell us what you think. Email us at

CapitaLand's offer for Pearl Bank Apartments matches the reserve price set by owners.

This translates to a land price of about S$1,515 per square foot per plot ratio (psf ppr), after factoring in a S$201.4 million premium for a lease top-up to a fresh 99-year lease.

"We are not paying over-the-top kind of price for the site," CapitaLand Singapore CEO Ronald Tay told reporters at the group's full-year earnings briefing.

"That is why we did not participate in the original tender. At that time, our assessment was that if anyone would go in, in the bidding situation, it would end up to be S$1,600-1,700 (psf ppr). The math would not make sense for us," he added. "Given where the market is today, the breakeven price we are talking about, there will be a decent profit margin to be made."

The public tender for Pearl Bank Apartments - marking its fourth attempt at collective sale - had closed on Dec 19; the laws governing collective sales allow owners to enter into a private treaty contract with a buyer within 10 weeks from the close of the public tender.

Subject to conditions being met, the land acquisition is expected to be completed in July or August this year, and the project is likely to be launch-ready in the first half of 2019.

The site atop Pearl's Hill in Outram Park has a land area of 82,376 sq ft, with an existing plot ratio of 7.45. As such, the site may be redeveloped into a residential development with a total gross floor area of 613,530 sq ft.

The project is targeted to be completed by early 2023, right after the opening of the Thomson-East Coast Line in Outram.

Consultants are expecting a breakeven price of S$2,000-$2,250 psf, and the average selling price to be around S$2,400 to S$2,600 psf.

JLL national research director Ong Teck Hui reckoned that location is a key selling point, being practically at the doorstep of the city - near Outram Park MRT station - as well as the abundant amenities in Chinatown and accessibility via key expressways. "Keen interest may be expected, from investors and occupiers who prefer living close to the city," he said.

Colliers International managing director Tang Wei Leng said she expects that future apartments in the development could be sold at an average price of S$2,600 psf or around S$2.5 million.

CapitaLand Singapore's Mr Tay said the upcoming project provides young urbanites a chance to own a home in "a mature estate brimming with local culture and heritage".

With Singapore's largest healthcare hub shaping up in Outram under a 20-year redevelopment plan by SingHealth, there is also strong potential demand from medical research and education professionals.

Expecting home-buying momentum to be sustained, Mr Tay said this is underpinned by strong economic conditions. He cited an internal study which shows that with some 30,000-35,000 units coming on-stream from all the GLS and collective sale sites sold, it could take about 2.5 years for the market to absorb this based on an annual demand of about 12,000 units. "So, I don't think there is a huge oversupply or supply overhang at this point in time. It depends on how this en bloc spate will pan out," Mr Tay said.

Amid pent-up homebuying demand, however, CapitaLand's share of unsold residential inventory stood at below 100 units.

The redevelopment of the Pearl Bank site is subject to a Pre-Application Feasibility Study (PAFS), which may cap the number of units to be built depending on traffic conditions.

Alex Poh, the collective sales committee chairman of Pearl Bank Apartments, said that the introduction of the PAFS just weeks before the close of the public tender posed a setback to concluding a sale at tender closing as interested parties needed more time to assess its impact.

While residents of Pearl Bank Apartments had previously explored the idea to conserve the 42-year-old development due to its history and unique horse-shoe shaped design, recent sentiment has strongly shifted to redevelopment.

"A deeper analysis of the building structure and the required enhancement work show that conservation would be a costly undertaking and a huge burden for the owners," Mr Poh said. "It is not a viable nor favourable option for the residents."

According to marketing agent Colliers International, owners of the 288 apartments (1,323 sq ft to 3,993 sq ft) stand to receive between S$1.8 million and S$4.9 million from the sale of the property. Owners of the eight commercial units (700-5,630 sq ft) in size, will potentially receive between S$1.2 million and S$6.9 million.

Asked how he felt about the other 10 collective sale sites that had their public tenders closed without concluding a sale, Mr Tay said: "Owners' expectations. I will just stop there."

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to