Ravi Chandran
Sultan Plaza relaunched its collective sale tender on July 11 This follows its initial launch in January this year the tender for Sultan Plaza will closed on March 28.
The reserve price for the Sultan Plaza relaunched collective sale is unchanged at $380 million, which translates to $1,860 psf per plot ratio.
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According to marketing agent ERA Realty Network, the site at which Sultan Plaza sits, can now be redeveloped for hotel, mixed commercial-residential, or full commercial use. The development baseline for the Sultan Plaza relaunched collective sale site is about 244,667 sq ft, and development charge is payable.
The maximum permissible gross floor area can be redeveloped to 283,803 sq ft, referenced against the 5.3 gross plot ratio of neighbouring City Gate and subject to regulatory approval. This translates to a land rate of $1,860 psf per plot ratio (ppr), inclusive of development charge and differential premium payable for topping up the lease.
Sultan Plaza comprising of 244 units of retail and office space sits between Beach Road and North Bridge Road, near the Kampong Glam conservation enclave. The Sultan Plaza relaunched collective sale site is a strata-titled development on a 99-year leasehold site that is currently zoned for commercial use under the 2019 Draft Master Plan. With its latest Outline Planning Permission approval, the new development could be developed up to a gross floor area of about 262,354 sq ft.
“Given Sultan Plaza’s strategic location, there is strong interest from developers, especially as it has been approved for hotel usage. This site presents a lot of architectural possibilities as it offers a multitude of options for redevelopment concepts,” says Jeremy Rikas Chiu, group division director at ERA.
There are three MRT stations across three different lines within 750m of the plot – Nicoll Highway station on the Circle Line, Lavender station on the East West Line, and Bugis station on the Downtown and East West Lines. The adjacent City Gate is a redevelopment of the former commercial building Keypoint. It had an approved development plot ratio of 5.3 and a development height control of about 140.48 above mean sea level (AMSL). City Gate is now a mixed-use development with 311 residential unit and 188 retail units completed last year.
Paul Ho, chief mortgage officer at iCompareLoan commenting on the Sultan Plaza relaunched collective sale site said, “Sultan Plaza is a choice location and so, it should get strong interest from local and overseas developers.”
The Sultan Plaza relaunched collective sale site has a lot of opportunities for the prospective buyer as it is a beautiful canvas where a piece of Singapore’s history can be redesigned with creative architectural concepts that can contribute to Singapore’s future development stories. Future expansion into the neighbouring site is also conceivable, which makes it attractive for developers who want to create an architectural masterpiece in this precinct.
With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.
The biggest gainers following the new property cooling measures is likely be owners of strata portfolio of offices and shophouses approved for commercial use. The property cooling measures affected almost all categories of buyers and is predicted to achieve its intended objectives of cooling demand and moderating price growth.
One report said investors looking for alternatives to park their money in the wake of property cooling measures, would divert their attention to the strata office and shophouse markets as they are not subjected to this round of purchase or sales restrictions/encumbrances.
Commercial properties such as the Sultan Plaza may be bought under personal name, but total debt servicing Total Debt Servicing Ratio (TDSR) will apply on the individual’s income on such purchases. To buy a commercial or industrial property under company name, total debt servicing ratio TDSR also applies on the individual director’s income if the company is an investment holding company or an operating company that is loss-making or does not have sufficient cash flow to servicing the repayment.
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