Two mixed-use sites launch collective sales

Collective sale fever is gaining steam by the day, with two freehold mixed-use projects joining the fray.

Industry watchers said that while collective sales for such projects are relatively rare, as always, location and price will be key.

Jalan Besar Plaza in Kitchener Road is making its third collective sale bid, with a guide price of $390 million – the same amount that the owners wanted in 2015, and $10 million more than last year’s failed attempt. A previous attempt in 2012 fizzled out before it reached the tender stage.

Tai Wah Building in Killiney Road has also hit the market with its first try at selling en bloc, with an $81 million asking price.

Jalan Besar Plaza, which houses 44 apartments and 111 commercial units, has an approved gross floor area of 179,697 sq ft.

The $390 million asking price works out to $2,170 per sq ft (psf) per plot ratio (ppr).

Marketing agent Huttons Asia has touted the block’s potential for redevelopment as serviced apartments, pending approval from the Urban Redevelopment Authority.

Separately, strata-titled Tai Wah Building, which is part of the Orchard Road retail belt, is trying for a collective sale just one year after being sold for $10 million by Isetan (Singapore).

The four-storey building is zoned for residential, with commercial use on the first floor. It houses two shops and six flats, with a gross floor area of 39,809 sq ft. This makes the asking price about $2,035 psf ppr.

Ms Swee Shou Fern, investment advisory senior director at mar-keting agent Edmund Tie & Company, said that the property could be turned into a “boutique residential development” or serviced apartments, subject to planning approval.

There have been 16 collective sales so far this year, 12 of them residential developments.

Other sales have included the mixed-use Goh & Goh Building, Citimac Industrial Complex and Elite Building, which was sold to a church last month.

One difficulty with mixed-use buildings is divvying up sales proceeds in a way that pleases the various unit owners, analysts noted.

ZACD Group executive director Nicholas Mak said: “One of the challenges which owners of shop space tend to face… is the heavy cost of relocating.”

Still, he said, the present momentum in the market “is causing the owners of mixed-use developments to consider banding together for collective sales as well”.

Mr Tan Hong Boon, regional director of investments at consultancy JLL, told The Straits Times: “I think there are many developers looking for sites – so the sites will fare reasonably well, unless they overprice themselves.”

The tender for Jalan Besar Plaza closes on Nov 10, while that for Tai Wah Building closes on Nov 15.

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