Far East Shopping Centre’s collective sale begins at $928 million
Far East Shopping Centre located at 545 Orchard Road will be launched to be sold as a collective purchase by a marketing agent CBRE at $928 million on the 25th of July. The commercial complex, which was strata-titled was built in 1974. It features a five-storey retail platform with 216 shops that are strata-tilted and a 10-storey office block comprising 80 offices that are strata-titled as well as two basement parking levels.
Watten House is funded by UOL Group and Singapore Land Group, has transformed into an elegant haven of calm for residents seeking shelter within the city.
It was famous for its retail stores that sold consumer electronics as well as golf equipment. House of Hung Jewelleries, an established family business in the field of jewellery is in operation since 1975. Shashlik Restaurant, a Russian-Hainanese restaurant, has been located on the sixth floor of the Far East Shopping Centre for more than 30 years. Nowadays, the stores are mostly occupied by travel agencies as well as tattoo studios, money changers along with beauty salons.
It was designed by the Ng family-owned Far East Organization, one of the largest stakeholder in Orchard Road, the 298-unit mixed-use strata-titled development was built at a cost of $20 million. Far East Shopping Centre was one of the most prestigious business complex within the region during the 70s. It was developed in response to Singapore government’s demand to turn Orchard Road into a prime commercial and tourist destination. The developer remains an ownership stake of more than 30% of the building in terms of shares.
The property located at 545 Orchard Road sits on a 36,014 sq feet site with a lease of 999 years that dates back to 1871. It is classified as commercial property. It is situated with a 75m frontage on Orchard Road and a 55m frontage on Angullia Park in prime District 9.
The site is earmarked to be redeveloped
Nearing 50 years, Far East Shopping Centre is one of the six buildings along that stretch Orchard Road – between Cuscaden Road and Orchard Boulevard – that the URA would like to transform to become “a new and exciting destination”.
The remaining five structures are the Hotel Properties Ltd’s (HPL) Voco Orchard Singapore, Forum the Shopping Mall and HPL House The Wharf Estates Singapore’s Wheelock Place and Bonvests Holdings’ Liat Towers.
As part of the Strategic Development Incentive (SDI) scheme, in April 2021, URA will grant 20% extra GFA (GFA) to property owners who are redeveloping their properties in conjunction along with one neighbor in order to make “a new location”. In addition to the increase of GFA and a change in building height, new owners will have the option of varying land use and the height of their buildings.
The month before, HPL reportedly submitted a Redevelopment plan in HPL’s Orchard Road assets under the SDI Scheme to URA to help redevelop Voco Orchard Singapore, Forum the Shopping Mall and HPL House.
It is believed that the Far East Shopping Centre site located at 545 Orchard Road has an allowable gross plot ratio (GPR) of 4.9 and an maximum height of 30 storeys in the new 2019 Master Plan. The confirmed existing GFA is approximately 242,145 square feet, which is equivalent to the plot ratio of 6.72. In the SDI Scheme, the maximum possible GFA can be 20% greater at 290,574 square feet, and GPR equal to 8.06.
The $928 million estimate set by CBRE amounts to $3,421 per plot ratio based upon the GFA of 290,574 sq feet in the SDI Scheme, assuming full commercial use. There is no additional buyer’s stamp duty is required since the site is classified for commercial use.
“Short-fuse Collective Sale”
The Far East Shopping Center’s collective selling process began in June of last year and by the 24th of June the following year, it was won the backing of 80% of the owners of strata-titled units. “In the normal collective sale we are given a year to sell the property,” states Michael Tay, head of Singapore capital markets at CBRE. “In this case this is a short-fuse sale, since we need to begin the collective sale and then to sell the site at the time the year’s end so that the buyer can have time to file the Outline Planning Permission for the proposed developed integrated project for approval by the URA.”
In order to be eligible to be eligible for an exemption from the SDI Scheme, URA has specified that “all necessary property holders” who reside on 545 Orchard Road and the adjacent properties are required to submit an Outline Application to submit a joint proposal for redevelopment on or before December 31st of 2023. They have to get the required Written or Provisional Permission before December 31st, 2024.
The potential buyer of Far East Shopping Centre could decide to develop the property along with two adjacent sites that are Voco Orchard Singapore or Liat Towers. As part of the SDI plan, the new development could have an underground pedestrian walkway connecting to Orchard MRT Station, which will “significantly increase the number of people who walk through this area of Orchard Road”, according CBRE’s Tay.
“Far East Shopping Center is the sole commercial site that is available for sale on Orchard Road,” says Tay. Tay also suggests that buyers look at different possibilities for land use like hotel, retail residential, serviced apartment, residential MICE facilities, lifestyle purposes within the SDI Scheme.
Luxurious residences with 999-year leasehold located on the prime Orchard Road?
This property could be developed into a mixed-use development that includes hotel, retail and luxury homes. “Even although residential might not be the most ideal use due to that 60% additional stamp duty foreign buyers have to pay, this would be the first leasehold 999-year luxurious residential development along the Orchard Road thoroughfare,” Tay says. Tay. “And it is likely to draw local and foreign ultra-high networth people.”
The sole other luxury residential development in the middle of Orchard Road is the 175-unit 55-storey Orchard Residences. Orchard Residences that forms part of the mixed-use project that also includes Ion Orchard shopping mall, that is connected to Orchard MRT Station. Orchard MRT Station at the bottom. The Singapore-based CapitaLand and Hong Hong Kong’s Sun Hung Kai Properties jointly created the 99-year leasehold mixed-use development.
The high-end residences located at The Orchard Residences was officially launched in March 2007 and four penthouses were offered for sale at prices ranging from $5,600 to $5,600 per square foot at the end of the year. Based on caveats filed by the developer, the most recent sale of The Orchard Residences included a 2174 square feet three-bedder located on the 35th floor that was purchased to the tune of $6.7 million ($3,018 per square foot) during February.
The 338 unit Scotts Square, which is a freehold development located on the prime Scotts Road, just off Orchard Road, the latest deal was for a 947 sq ft two-bedder located on the 25th floor. It was sold at $2.9 million ($3,062 per square foot). The freehold development developed by Wharf Estates Singapore was completed in 2011.
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