SINGAPORE, 16 May 2023 – PropNex Realty has today announced that a 999-year leasehold commercial site bounded by Hoe Chiang Road and Lim Teck Kim Road in the city centre will be relaunched for collective sale for a reserve price of $216 million on 17 May 2023. The reserve price is unchanged from the previous tender that was launched on 19 January 2023, where the tender closed with no bids (on 22 March 2023).
The reserve price translates to an estimated land rate of $2,610 psf per plot ratio (psf ppr) for an office development – inclusive of an estimated land betterment charge (LBC) of $55 million. The buyer also has the option to redevelop the site as a hotel development – which will put the land rate at $2,671 psf ppr, inclusive of the estimated LBC of $61.3 million.
The site comprises two rows of commercial buildings (1, 3, 5, 7, 9 Hoe Chiang Road and 2, 4, 6, 8, 10 Lim Teck Kim Road) and a piece of remnant land between them. The amalgamation of the two sites and the remnant land will take the total estimated land area to 1,722.5 sq m (approximately 18,540 sq ft). Under the Master Plan 2019, the subject site is zoned for commercial use and has a gross plot ratio of 5.6.
Tracy Goh, Head of Investment and Collective Sales at PropNex, said, “The recent hike in the Additional Buyer’s Stamp Duty (ABSD) rate for foreigners from 30% to 60% is likely to divert more funds to commercial real estate investment and redevelopment, as sites that are zoned for commercial use are not subjected to ABSD. In addition, the prime office market remains resilient in Q1 2023 amid tight supply of space, with rentals rising by 5.1% QOQ as per URA data. Meanwhile, the recent sale of office space at Solitaire on Cecil also set a new price record (on PSF basis) for strata office space in the central business district.”
In April, three floors at the upcoming freehold office development Solitaire on Cecil were sold for $162.8 million, which works out to $4,300 psf on strata area – marking the highest transacted price in PSF terms for strata office space in the CBD. It has breached the previous record of $4,196 psf set by a deal for office space on the 12th floor of the same project for $52.3 million in March. PropNex understands that the developer of Solitaire on Cecil has sold more than half of the 190,000 sq ft of strata office space at the project.
As for office rentals, URA Realis data showed that 762 office rental contracts were signed in Districts 1 and 2 in Q1 2023 – the highest number of rental contracts in a quarter on record. The still healthy office market, coupled with the ABSD hikes will see renewed investment interest in the commercial property segment.
Ms Goh added, “Currently, there are no other 999-year tenure commercial sites for sale in CBD. Furthermore, the Hoe Chiang Road/ Lim Teck Kim Road site is not affected by restrictions limiting the strata subdivision of commercial property in the CBD, which will offer more flexibility to the purchaser to redevelop this plot into an iconic strata-titled office building. The restrictions on strata subdivision is expected to crimp the supply of strata-titled office units in the city centre, and it will help to prop up the demand for and prices of such office spaces.”
The collective sale site has a dual frontage to Hoe Chiang Road and Lim Teck Kim Road. The future development on the site could potentially enjoy views of the waterfront and is within walking distance to the Tanjong Pagar MRT station, as well as two upcoming stations, Cantonment and Prince Edward Road stations on the Circle Line which are slated to be ready in 2026.
In addition, the site is also surrounded by numerous amenities, including the 100AM mall, Icon Village, Guoco Tower, and International Plaza. Meanwhile, a wide range of eateries can also be found in Tanjong Pagar Road, Tras Steet, Peck Seah Street, as well as hawker centres in Amoy Street, Tanjong Pagar Plaza, and Maxwell Road.
The collective sale tender will close at 2pm on 31 May 2023.
Lim Teck Kim Road property. Source: PropNex
Hoe Chiang Road property. Source: PropNex