– Slight revision to land rate following URA’s verification of Gross Floor Area of The Arcade en bloc sale site
– Reserve price of SGD780 million will now translate to a land rate of SGD2,840 per square foot per plot ratio
Colliers International announced on Dec 16 that the tender submission date for the collective sale of The Arcade in Raffles Place has been extended following feedback from developers that they require more time to assess the site.
The tender submission deadline for The Arcade en bloc sale site has therefore been extended from 3pm on 8 January 2020 to 3pm on 5 March 2020.
The Arcade at 11 Collyer Quay – in the heart of Singapore’s bustling central business district (CBD) – was launched for collective sale for SGD780 million on 14 November 2019. The 20-storey development comprises 127 office and retail units. (Refer to news release dated 13 November for more details.)
Ms Tang Wei Leng, Managing Director at Colliers International, said, “Since the collective sale tender was launched, The Arcade has received strong interest from numerous developers and we have conducted many site viewings. With the long Christmas and New Year holidays upon us, many developers have requested for us to extend the deadline for the submission of tender so that they have more time to evaluate the site owing to its tremendous redevelopment potential. We have taken this feedback into consideration and have revised the tender closing date.”
In addition, Colliers has also revised the land rate upon receiving the verified Gross Floor Area (GFA) for the site from the Urban Redevelopment Authority (URA). The reserve price of SGD780 million will now translate to a land rate of SGD2,840 per square foot per plot ratio (psf ppr) – up marginally from the estimated land rate of SGD2,833 psf ppr indicated in the tender launch announcement last month.
Under the Master Plan 2019, The Arcade en bloc sale site – which has a 999-year land tenure (effective from 20 April 1826) – is zoned Commercial with a Gross Plot Ratio of 15. The Arcade en bloc sale site in District 1 offers developers an exclusive opportunity to create a new focal point of commerce and lifestyle in the CBD.
Given its prime location in the city centre, proximity to wide-ranging amenities, and excellent transport connectivity, the site boasts great potential for the development of a mixed-use project. The developer could potentially redevelop the site to offer a 50-storey iconic, modern skyscraper, with panoramic views of the Marina Bay, and spectacular skyline of the new Downtown.
The site enjoys prominent dual frontage onto Raffles Green – a popular gathering place of executives and professionals in Raffles Place – as well as Collyer Quay, a main arterial road that connects to other parts of Singapore. It is also well-served by public transport with convenient access to the Marina Coastal Expressway, Pan Island Expressway and other major expressways. Additionally, the site has immediate access to the Raffles Place MRT interchange station, which connects the East-West and North-South Lines.
According to a recent report by PWC and the Urban Land Institute, Singapore now offers the best real estate investment prospects in the Asia Pacific region. The Emerging Trends in Real Estate Asia Pacific 2020 report noted that sentiment for Singaporean assets has rebounded. It added that the office sector has largely absorbed the oversupply, and with vacancies at an all-time low and limited supply in the pipeline, confidence in medium-term prospects has returned.
The Arcade is surrounded by many prominent buildings – including Ocean Financial Centre, Republic Plaza, One Raffles Place, OUE Bayfront and the upcoming CapitaSpring – which house renowned financial institutions and large corporations. A myriad of retail and dining options are also within easy reach in the Raffles Place area as well as the nearby Boat Quay leisure and entertainment hub.
Subject to relevant approvals, the 2,035.4 square metre (approx. 21,909 square feet) The Arcade en bloc sale site could potentially be redeveloped into a 50-storey integrated development, comprising a hotel, residential units, office and retail space.
Ms Tang added, “The response to the site has been positive so far, with developers particularly drawn to its city centre location, proximity to the Raffles Place MRT interchange station, its 999-year land tenure, and the ongoing urban transformation in the area. We believe the extension of the tender submission date will give developers more time to uncover many more merits of this unique redevelopment plot.”
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.
He added, “Even with the global economic uncertainties, Singapore remains an attractive location for investments to flow into, and properties like The Arcade are prime real estates worthy of investment.”