The rejuvenation of Selegie Road will move further along if the owners of two buildings there succeed in their collective sale bids.
Selegie Centre, a 10-storey freehold commercial building, has obtained approval from around 90 per cent of owners by share value and strata area to launch a tender with a reserve price of S$120 million.
The land rate works out to S$1,942 per square foot per plot ratio (psf ppr).
This is the development’s third bid at an en bloc sale, and its marketing agent is ERA Realty.
Over at Peace Centre/Peace Mansion, things are pending. This mixed-use development at 1 Sophia Road, off Selegie Road, is 10 per cent shy of the requisite 80 per cent approval level; over 70 per cent of owners by share value and strata area have said yes, including one owner who accounts for about 40 per cent.
For the owners, said to be eyeing a reserve price of S$650 million, this will be their fourth attempt at a collective sale. The marketing agent is JLL.
The owners of Selegie Centre, home to 33 shops and 25 apartments, are looking to launch the collective sale tender next week, with a closing date of July 26, said M Thomas, chairman of the collective sale committee (CSC).
“Areas around Mackenzie Road/Bukit Timah Expressway and Rex Cinema are rapidly being rejuvenated. Buying Selegie Centre should be an excellent investment opportunity. We already have enquiries from several potential buyers and we hope to sell our building fast,” he said. The site’s plot ratio is 6.35.
Peace Centre has about 50 years left on its original 99-year leasehold tenure, so its buyer will have to fork out an estimated S$200 million for a lease top-up premium.
Development charges are not payable.
Considered to be located on the fringe of Orchard Road, Peace Centre is also near the National Museum of Singapore, Singapore Art Museum, School of the Arts and Singapore Management University.
It sits on a 76,617 sq ft site, with an as-built gross floor area (GFA) of slightly over 600,000 sq ft. The property has 32 floors, with Peace Centre being a part-seven-, part-10-storey commercial podium block, and Peace Mansion, a 22-storey residential tower with 84 apartments and two penthouses.
Some other commercial buildings along Selegie Road are undergoing a makeover after having changed hands in recent years.
Early this year, Hong Kong private equity property group Gaw Capital Partners completed the acquisition of PoMo, a nine-storey office-and-retail block, from Enviro-Hub Holdings and BS Capital for S$342 million.
Last September, Lian Beng and Apricot Capital acquired mixed-used commercial and residential building Wilkie Edge near Little India for S$280 million from CapitaLand Commercial Trust. That price worked out to S$1,299 psf based on GFA, and S$1,812 psf based on the building’s net lettable area.
So far, the collective sale fever that has swept through the residential market has not spilled over into the commercial segment in a big way. There have been 31 residential developments sold in collective sales this year for close to S$9.2 billion, but only one commercial-residential building – Chinatown Plaza – has been sold, for S$260 million.
The other non-residential collective sale this year was Pei Fu Industrial Building for S$76.25 million.
There is a growing list of commercial buildings whose collective sale tenders have closed this year but remain unsold. They include The Stradia, ICB Shopping Centre, Jalan Besar Plaza and Verdun House.
The tenders for Goldhill Shopping Centre and Katong Plaza close on June 27 and July 16 respectively. There are still many more in the pipeline vying to cross the requisite approval to launch a collective sale.
Brokers have said that pricing for commercial sites and the location are two very critical success factors.
Mixed-use sites with a retail component are harder to sell, given that the strata retail segment is struggling. The commercial component of a residential-cum-commercial site can jack up the reserve price out of the realistic range.
Tan Hong Boon, regional director at JLL, said: “When malls are doing well and owners are running good businesses, they will need a big premium to prompt them to sell their premises.
“But this may not draw a buyer, which is why it is a tough balancing act to undertake a mixed-use en bloc deal.”