Tanglin Shopping Centre may hit en bloc trail

Published May 4, 2007

Tanglin Shopping Centre may hit en bloc trail

By KALPANA RASHIWALA


(SINGAPORE) The owners of Tanglin Shopping Centre may hit the en bloc trail and could pocket a total of around $500 million, property market watchers say.


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Shopping landmark: Industry observers reckon the plot could fetch about $1,800 psf ppr or $518 million


Some owners have been mulling over a collective sale of the ageing freehold property, and have requisitioned an extraordinary general meeting tomorrow to discuss the idea and elect a sales committee, BT understands.

Tanglin Shopping Centre is on a site of about 68,500 sq ft and has a strata area of about 230,000 sq ft. It comprises a seven-storey retail podium, a 12-storey office tower, a basement carpark and a multi-storey carpark.

Analysts estimate the existing gross floor area (GFA) at 300,000 sq ft and reckon a new project would be allowed the same maximum GFA, even though this is slightly above the maximum 287,700 sq ft based on the site's 4.2 plot ratio under Master Plan 2003.

The site is zoned for commercial use with a 20-storey maximum height under the Master Plan.

Industry observers reckon the plot could fetch about $1,800 psf of potential gross floor area, which works out to $518 million. The assumption is that no development charge is payable.

The breakeven cost for a new commercial project could be around $3,200 psf. 'The site could be suitable for a retail mall and perhaps some small office, home office (Soho) units,' a property player said.

Observers say redeveloping the landmark shopping centre would spruce up the stretch of Tanglin Road that joins Orchard Road and help it keep pace with major new developments going up near Orchard and Somerset MRT stations.

Furthermore, the present Tanglin Shopping Centre would stick out like a sore thumb when the St Regis Residences and hotel next door are completed soon by City Developments, Hong Leong Holdings and Trade and Industrial Development, which is a partnership between Hong Leong and Japan's Mitsui Group.

Market watchers reckon Hong Leong Group, which includes listed CityDev, is eyeing Tanglin Shopping Centre with a view to putting up a project that would complement the luxurious St Regis.

CityDev, through its hotel arm Millennium & Copthorne Hotel, already has a stake of about 35 per cent in Tanglin Shopping Centre, including ownership of 325 parking lots.

Market watchers say Hong Leong has been in talks with some owners at the shopping centre to ask if they want to sell their units to it, rather than wait for an en bloc sale.

If CityDev were to gain control of the shopping centre, the new project on the site could likely have a bridge link to the St Regis development.

Hong Leong's sizeable presence in the area includes Orchard Hotel, Palais Renaissance and Delfi Orchard. It also owns some units in Orchard Towers.

Other contenders for Tanglin Shopping Centre include Far East Organization and Hotel Properties, both of which also have big stakes in the area. Far East owns some units in Tanglin Shopping Centre and its listed unit Orchard Parade Holdings owns the namesake hotel next door.

Hotel Prop owns a stretch of properties nearby - HPL House, Forum The Shopping Mall, Hilton Hotel and Four Seasons Hotel. It also has a stake in Ming Arcade.

Tanglin Shopping Centre was developed in two stages, in the early 1970s and early 1980s. The project, developed by SK Chee Pte Ltd, was famous back then for its medical clinics.

Clinics still operate in the building, and property agents say some doctors who own their premises may be reluctant to do an en bloc sale because of the difficulty of buying replacement premises in the area.