Sim Lim Square will be put up for collective sale, after securing the requisite agreement of at least 80 per cent of its owners.
The mall, located on Rochor Canal Road, will go on sale at S$1.3 billion, its sales committee head Vikas Gupta told TODAY on Wednesday (March 20) evening.
He disclosed that 80.82 per cent of owners by share value and 81.43 per cent of owners by strata area voted for the mall to go on sale.
The committee managed to cross the requisite 80-per-cent-consent mark on Tuesday, a process which Mr Gupta said was “challenging”.
Tender documents are being finalised and the marketing agent is expected to reach out to prospective buyers by end-April. Mr Gupta added that more details will be announced later this week by its marketing agent SLP Scotia.
The asking price is higher than the initial S$1.1 billion when owners started collecting signatures for an en-bloc deal about a year ago.
At the time, it was estimated that owners at the six-storey 99-year-leasehold mall could stand to receive between S$1 million and S$60 million if the sale goes through.
Being a strata-titled mall, the shops at the 462-unit, 32-year-old building are owned by individuals.
Mr Gupta said that since the committee started pushing for a collective sale two years ago, business conditions for the retail landscape have changed.
“When we first started, e-commerce was just picking up. By now, it has become mainstream. The market conditions have motivated more subsidiary proprietors to sign,” he added.
The structure of the building also meant that owners could not accommodate requests from major brands which wanted to lease a huge space in the mall, he noted.
Owners had previously told TODAY that there has been falling traffic even with the opening of Downtown Line’s Rochor MRT Station beside it, and rental yields have gone lower.
The mall’s strata-titled status hindered it sometimes from making improvements. For example, it was very difficult to get consensus to pool funds to build a direct underground linkway connecting the mall to Rochor MRT Station.
Mr Gupta foresees strong interest from developers for the collective sale given its location, adding that market conditions for commercial projects have “improved drastically”.
Analysts told TODAY before that capital may have shifted to commercial properties, away from residential ones, since the cooling measures imposed last July affects only residential redevelopments.
Developers have to pay an Additional Buyer’s Stamp Duty (ABSD) of 25 per cent, in addition to a non-remissible 5 per cent ABSD when buying land for residential redevelopment.
‘SERVED ITS PURPOSE’
An owner of multiple shops, who did not want to be identified, said that he voted for the en-bloc sale because he felt that the mall has “served its purpose” to help many businessman make a living and even made some of them millionaires.
“Things might need to change. Building old, buildings owners also,” he said.
He added that the slowing business due to e-commerce is another factor why he decided it is time for a sale.
Another landlord in his 50s, who own one unit on the second floor selling electronics and security products, said that he was notified of the sale through a WhatsApp chat group.
He agreed to opt for a collective sale because he thinks it is time to retire. He estimates that he will receive about S$1.2 million if the deal goes through.
The move by Sim Lim Square owners comes after the nearby freehold Golden Wall Centre was sold at over S$276 million (S$2,331 psf per plot ratio) last November.
Source: Today – 20 Mar 2019