Two owners holding a combined 23 percent stake in Orchard Shopping Centre are seeking investors for their retail shops.
The 18 units for consideration make up part of the ground floor and the entire second floor of the building, all facing Orchard Road.
The move comes after Australia’s Lend Lease bought the Somerset Central site next door for a record land price of S$1,455 per square foot, or a total of S$670 million last year.
At more than 30 years old, Orchard Shopping Centre may be seeing its last leg of rentals.
But the two owners of 18 frontage retail space at the complex believe they can command a premium for their properties and they are hoping to get offers that will more than match recent prices of basement units at Lucky Plaza.
Cushman and Wakefield is their marketing agent.
Donald Han, Managing Director, Cushman and Wakefield, said: “For the ground floor, we’d expect an indicative of around S$15,000 to possibly even S$18,000 psf. For the second floor, it would work out in the region of about S$3,000 psf. If you total it up, in total consideration, we might be looking at close to about S$55 million to maybe even up to $60 million in terms of total value.
But then again, we feel that there probably will be a premium attached to this because there’s hardly any availability of such properties in the marketplace.”
Some 15 owners have a stake in Orchard Shopping Centre with Far East Organisation owning 50 percent.
Malaya Silk and Shankar’s Emporium are owners of the frontage retail space who owns a combined 23 percent.
Property analysts say a 23 percent stake might be enough of a bargaining chip when it comes to negotiating a potential collective sale.
This is because developers are required to own 80 percent of a commercial building before they can trigger a collective sale to redevelop a site immediately.
Cushman and Wakefield expects both local and overseas investors, including Far East Organisation, to be interested.
Donald Han said: “We may get owner-occupiers, we may receive expression of interest from investors, it could be foreign investors as well as local high-networth individuals. It could be companies who are looking at potentially occupying the premises. So a variety of options that’s available. And we’re seeking through the expression of interest to derive the proposals.”
But with two brand new mega retail projects just next door, it is no wonder some Orchard Shopping Centre owners are looking to cash in on the Somerset property action.
This area has created quite a buzz ever since Australia’s Lend Lease paid a record land price for the site above the MRT station.
And further down the road, there is also Far East Organisation’s Orchard Central development, which has been touted as the tallest retail building in Singapore.
Both projects are expected to be completed by 2009.
Source: Channel NewsAsia, 25 January 2007