SINGAPORE – International Plaza in Tanjong Pagar has been launched for sale by public tender at a record reserve price of $2.7 billion.
The sale could be Singapore’s largest en-bloc deal in terms of number of units and value and comes after the owners gave the green light on July 7 to put the 50-storey leasehold building on the market.
The reserve price of the commercial and residential block works out to a land rate of $2,448 per square foot per plot ratio, marketing agent Edmund Tie told The Straits Times on Wednesday (Sept 1).
If the 25 per cent intensification in gross plot ratio is approved, the land rate will work out to about $2,170 per square foot per plot ratio.
The biggest collective sale in dollar terms up to now has been the $1.34 billion Farrer Court deal sealed in 2007.
International Plaza – one of Singapore’s biggest integrated developments – was built in the 1970s and comprises 209 apartments, 559 office units, 192 strata shops, a carpark and a swimming pool on the 36th floor.
Edmund Tie did not disclose the amounts the owners stand to get.
The property’s commercial zoning means a developer need not pay Additional Buyer’s Stamp Duty and foreign buyers can keep the land. The tender closes at 3pm on Nov 30.
Ms Swee Shou Fern, executive director of investment advisory at Edmund Tie, said the building at the junction of Anson Road and Choon Guan Street “represents the last strategic corner plot with main road frontage at the gateway of the Tanjong Pagar precinct”.
The property, which is zoned for commercial use with height control of up to 250 metres, sits on a land area of about 6,976 sq m (75,089 sq ft) with 48 years left on the lease.
It was developed by the Cheong family, who are related to the Cheongs who control Singapore-listed Hong Fok Corp.
The collective sale process began in October 2019 and was supposed to be wrapped up by last October but it took a further 10 months due to the pandemic and after an extension was granted under new measures implemented last year.
International Plaza meets the criteria to qualify for the Central Business District Incentive Scheme, which allows properties to have their gross floor area increased by 25 to 30 per cent depending on the proposed land use.
It has applied to the Urban Redevelopment Authority to increase the gross floor area by 25 per cent, with 60 per cent of the development gross floor area earmarked for commercial use and 40 per cent for non-commercial such as apartments and a hotel, Ms Swee said.
If approved, the site can be redeveloped with a gross floor area of 167,826.16 sq m (1,806,464 sq ft) or an equivalent plot ratio of 24.06.
Ageing office developments in the CBD can tap this scheme to convert to a residential mixed development, allowing developers to take advantage of a robust housing market, said Mr Wong Xian Yang, head of research for Singapore at Cushman & Wakefield.
“In view of Singapore’s expected strong recovery, en-bloc developments that launch early could enjoy a first-mover advantage,” he added.
An unnamed developer undertook to bid at least $1.508 billion for a government land site in Marina View in June. The white site is intended for mixed use with residential, hotel, commercial and/or serviced apartments. The tender closes at noon on Sept 21.
Depending on what International Plaza’s proposed use is, the Marina View government land sales (GLS) site may be a rival, Mr Wong said, adding: “GLS sites are a more straightforward route for land acquisition.
“But there is more flexibility for International Plaza, as it can be developed into a fully commercial development or a mixed development.
“Given their large quantum, both Marina View and International Plaza would appeal to larger developers or joint ventures. For the Marina View site, the winning bid is expected to be closer to $2 billion.”
Ms Tay Huey Ying, JLL Singapore’s head of research and consultancy, noted that developers may deem it “advantageous to acquire sites for office development before land prices surge” on a recovery in the commercial market.
This version of article written by Grace Leong and first appeared at The Business Times.
Photo: Edmund Tie & Company