International Plaza Sets Reserve Price For En Bloc Sale At S$2.7bil
SINGAPORE – Following a report in early-August that unit owners at International Plaza have approved its collective sale, the “ultra-prime” mixed-use development in Tanjong Pagar has been launched for en bloc sale with a reserve price of S$2.7 billion, reported The Edge on Wednesday afternoon (1 September, SGT).
If the strata unit owners find a willing buyer, it would set a new record for Singapore’s largest collective sale transaction following the S$1.3388 billion en bloc sale of the former Farrer Court in 2007.
More importantly, a successful collective sale will likely set a precedent for other mixed-use projects planning a similar move.
Standing on a 75,089 sq ft plot with a prominent 200m frontage at the intersection of Choon Guan Street and Anson Road, International Plaza has an existing plot ratio of 19.24 and gross floor area (GFA) of about 1.445 million sq ft. As the remaining leasehold term is only about 48 years, a differential premium and lease-upgrading premium of around S$800 million is payable.
As such, the S$2.7 billion reserve price works out to a land rate of about S$2,448 psf per plot ratio (psf ppr), shared Swee Shou Fern, Executive Director at Edmund Tie, the appointed marketing agent.
Still, the land rate can be reduced to S$2,170 psf ppr as an outline application has been submitted under the government’s CBD Incentive Scheme to raise the GFA by 25 percent, as well as increase the plot ratio to 24.06 and boost the GFA to roughly 1.8 million sq ft.
Under the 2019 Master Plan, the plot ratio for International Plaza stands at 10.5, which is nearly half of the existing GFA. Given that the site is zoned for commercial use, at least 60 percent of the GFA is allocated for office space, while the remaining 40 percent can be designated for other uses like residential and hospitality.
Since the announcement in August that unit owners at International Plaza have approved the en bloc sale, Swee revealed that there has been significant buying interest from “the big boys”.
“Given the ticket size, I would expect some of the developers to bid as a consortium,” she said, adding that she anticipates major foreign companies to take part in the tender exercise, which will close on 30 November.
Even with the en bloc sale underway, renovations at International Plaza have continued, revealed Gerald Cheong, whose grandfather constructed the building and whose family has a significant interest in the property. The refurbishments include lift upgrading, façade facelifts, escalator replacements, and fixing of spalling concrete.
Thanks to the good maintenance, the mixed-use property managed to hold up its rents and capital values. For instance, a 936 sq ft office unit on level 28 was sold for S$1.8 million (S$1,926 psf) last month.
Furthermore, the Chairman of the collective sale committee, Kevin Liang, highlighted International Plaza’s highly desirable address in Singapore’s central business district (CBD).
“International Plaza is uniquely located in the heart of the CBD, and right next to the Tanjong Pagar MRT Station. The bus stop and taxi stand is right at the doorstep.”
“With its ultra-prime ‘crème de la crème’ location in the heart of Tanjong Pagar precinct, International Plaza is in a class of its own. This will give the successful buyer the unique opportunity to develop one of the most iconic, trophy properties in Singapore,” he added.