Successful En Bloc Sale Of People’s Park Centre Would Help Revive Chinatown
SINGAPORE – Real estate experts revealed that if the People’s Park Centre finds a buyer that will redevelop it, it could help breathe new life into the Chinatown area, reported The Business Times on Wednesday evening (6 July, SGT).
On Wednesday, it was reported that the mixed-use commercial property with 256 office units was put up for en bloc sale via public tender with a reserve price of S$1.8 billion.
Given People’s Park Centre’s proximity to the Chinatown MRT interchange and historical landmarks, there’s an opportunity to construct an iconic integrated project in the heart of Chinatown, and this development could spur gentrification efforts in the area, said Cushman & Wakefield’s Research Head Wong Xian Yang.
Colliers’ Head of capital markets and investment services Tang Wei Leng noted that many buildings in the vicinity are getting old and in need of a new lease of life.
Coupled with the widened roads and enhanced accessibility in the area, the newly-completed State Courts as well as the soon-to-be finished One Pearl Bank and a high-end hotel under the Mondrian chain are already helping to rejuvenate Chinatown.
Some older properties in the neighbourhood are already gaining from the uplift created by the higher footfall, and new concept shops that have sprung up in the form of F&B outlets as well as those offering wellness and lifestyle products and services.
“Many shophouses are also being traded at high values and are in high demand by family offices,” Tang said, adding that People’s Park Centre presents an opportunity to redevelop a sizeable land plot in an area undergoing gentrification.
Huttons’ Senior Research Director Lee Sze Teck concurs. He said it’s probably time to revamp the whole mix in the vicinity.
“The stretch along Eu Tong Sen Street can do with some rejuvenation. Even if buildings there don’t go en bloc, the retail mix probably has to be updated. It needs an overhaul.”
However, Colliers’ Tang thinks that People’s Park Centre’s reserve price of S$1.8 billion is “on the high side,” amidst prevailing market conditions.
“We think the interest is likely to come from consortiums of developers and financial partners. The hurdle will be the higher cost considerations, which could pose a price mismatch in expectation between the sellers and buyers,” she explained.
As property players are more prudent with acquisitions surpassing S$1 billion, Huttons’ Lee believes that perhaps up to three consortiums may make an offer for the site to share the risks.
“Although the price is slightly high, there is still merit in this site because the Chinatown MRT station is directly beside it, and it is very near the city.” In fact, Raffles Place is merely a 5-minute drive or a short MRT ride away, he added.