Shenton House Owners Enter Into Private Talks After En Bloc Tender Closes
SINGAPORE – The collective sale tender of Shenton House closed on Tuesday (11 April) with zero takers. Consequently, the unit owners have entered into private treaty negotiations in an attempt to secure a buyer, reported The Business Times on Wednesday afternoon (12 April, SGT).
Notably, the 99-year leasehold commercial property in Singapore’s central business district (CBD) was launched for sale on 6 February with an indicative price of S$590 million. Before that, the asset was put up for en bloc sale in March 2012 with a guide price of S$530 million.
Tan Hong Boon, Executive Director of capital markets at Jones Lang LaSalle (JLL), the property’s sole marketing agent, disclosed that interested buyers include local and offshore real estate developers.
“We have a few expressions of interest which we are following up on,” he revealed.
The Shenton House site qualifies for the CBD Incentive Scheme that will grant it a 25 percent bonus gross floor area (GFA) and a higher gross plot ratio of 14.0 if it’s redeveloped into a mixed-use project or a hotel. At present, the site’s plot ratio is 11.2.
The indicative price of S$590 million translates to around S$2,035 psf per plot ratio inclusive of the S$446 million the buyer needs to pay for the land betterment charge and to refresh the lease to 99 years.
If the additional 7 percent bonus balcony GFA for the redeveloped project’s residential component is taken into consideration, the land rate would be about S$2,012 psf per plot ratio.
At present, Shenton Way consists of 203 commercial units and a car park. It stands on a land plot measuring about 36,350 sq ft that is zoned for commercial use.
Meanwhile, two commercial properties in Tanjong Pagar in Singapore’s CBD – one that stands on a 8,449 sq ft site in Hoe Chiang Road and another on a 8,450 sq ft site on Lim Teck Kim Road –also entered into private treaty negotiations after its tender closed on 22 March with no takers.
Their total reserve price of S$216 million works out to around S$2,602 psf per plot ratio, including a land betterment charge of S$54.1 million. The commercial buildings, which were completed in 1959, are being marketed by PropNex.
Furthermore, several other commercial properties are still available, as sentiment became cautious amidst higher funding costs. Last week, the Golden Mile Tower was launched for sale with a reserve price of S$600 million. Bugis Point at 530 North Bridge Road was also put up for sale through an expression of interest (EOI) exercise with a guide price of S$92 million.