January 18, 2023
18 January 2023, SINGAPORE – PropNex Realty, the largest real estate agency in Singapore 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 launched for collective sale for a reserve price of $216 million on 19 January 2023.
Hoe Chiang Road
Lim Teck Kim Road
The reserve price works out to an estimated land rate of $2,602 psf per plot ratio (psf ppr) for an office development – inclusive of an estimated land betterment charge (LBC) of $54.1 million. The buyer also has the option to redevelop the site as a hotel development – which will see the reserve price translating to a land rate of $2,662 psf ppr inclusive of the estimated LBC of $60.4 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) - forming a rectangular-shaped plot that would be ideal for a hotel or a Grade A office development amid the ongoing transformation in Tanjong Pagar. 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, “Currently, the two buildings on the plot are only 5-storey high, the successful buyer can redevelop this site to build a 35-storey tower to realise potential gains from the plot ratio of 5.6 under the URA Master Plan. With the ongoing rejuvenation in the vicinity – including redevelopment projects such as Keppel South Central, Newport Tower, and the former Realty Centre – as well as the government’s plan to further enliven downtown Singapore, we believe this site presents a good opportunity to build a new hotel or serviced apartments to serve tourists and business travellers.
“As international travel resumes post-pandemic and the government having earmarked about $500 million to kick-start the tourism industry, we expect Singapore’s hospitality sector to see a sustained recovery over the next few years. In September 2022, the average hotel room rates in Singapore hit a 14-year high to $283.47 – up by 83% year-on-year - on the back for the F1 night race and various MICE events. Furthermore, the site is also not far from the future Greater Southern Waterfront precinct, which is set to be an iconic live-work-play destination. We anticipate that these developments could provide further upside for the site over the mid- to long-term,” Ms Goh added.
The site has a dual frontage to Hoe Chiang Road and Lim Teck Kim Road. The future development on the site may 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, there are no shortage of retail and F&B offerings in the surrounding areas, 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.
Ms Goh noted, "The Singapore government has rolled out more cooling measures in December 2021 and September 2022, to moderate housing demand and to encourage buyers to be more prudent about their property purchase amid rising interest rates. This could see more real estate investors turning their attention to commercial property sites, which are not subjected to the additional buyer’s stamp duty (ABSD). In view of the site’s strong location attributes and redevelopment potential, we expect keen buying interest for this collective sale plot.”
The collective sale tender will close at 2pm on 22 March 2023.
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