Mediacorp sells Caldecott Hill site for S$280.9m

The buyer is an entity to be owned by Perennial Real Estate Holdings and Kuok Khoon Hong

Wed, Dec 16, 2020

KALPANA RASHIWALA


AN ENTITY to be jointly owned by Perennial Real Estate Holdings and its chairman Kuok Khoon Hong has clinched Mediacorp's former Caldecott Broadcast Centre plot for S$280.9 million.

It is located at the heart of the Caldecott Hill Good Class Bungalow Area. Mediacorp has been granted an outline approval by the Urban Redevelopment Authority (URA) for a proposed site redevelopment into two-storey bungalows with a minimum land area of 800 square metres per house.

However, the buyer may explore other development options upon completion of the transaction, CBRE and Showsuite Consultancy, the marketing agents for the site, said on Tuesday.

BT understands that while the bungalow development is the base-case assumption that the buyer used in crafting its winning bid, it might potentially consider other uses, including developing a retirement village.

Another potential scheme could be a combination of some bungalows (for sale) and a retirement village, suggest observers.

When the tender for the site was launched in October, CBRE said that "we understand that URA may also be prepared to consider a proposal for the site to be redeveloped into a retirement village, subject to detailed evaluation".

Perennial is already involved in this market segment. It has a portfolio of integrated eldercare facilities in China under the Renshoutang brand providing retirement homes, rehabilitation services, nursing care and dementia care.

In all, the portfolio comprises about 10,000 beds in operation, mostly in Shanghai but also in other cities such as Wuhan and Changsha.

Earlier this year, a subsidiary of Perennial Real Estate Holdings partnered Orpea (a leading European player in global dependancy care) to bid for a government site along Gibraltar Crescent near Sembawang Park designated for a dementia care village. The duo placed the sole bid for the plot but their S$15 million offer was rejected as it was deemed too low.

Mediacorp's sale of its Caldecott Hill property follows a closely contested tender exercise that closed on Dec 9, 2020, CBRE and Showsuite Consultancy said.

At the time of the tender launch, the two marketing agents said that a Mediacorp-appointed architect had worked out a scheme for the site to be subdivided into 67 bungalow plots, subject to approval from the authorities.

Some market watchers, using a back-of-the-envelope calculation, estimate that assuming the site is redeveloped into such a scheme, the S$280.9 million price works out to about S$580 per square foot (psf) on the land area of 752,015 sq ft, inclusive of two payments the buyer will have to make to the state.

These are: a differential premium for changing the site's use from its exising zoning of civic and community institution, to landed residential; and a lease extension premium for extending the site's lease to a fresh 99-year tenure. The Caldecott Hill site currently has a balance lease term of 73 years.

On a net land area - after setting aside space for roads and parks - the unit land price works out to around S$760 psf.

Michael Tay, head of capital markets for Singapore at CBRE, who led the negotiations, said: "This is the largest private redevelopment site sold in 2020, and this is testament to developers' confidence in the Singapore market. We understand that the purchaser will be working with relevant authorities to review redevelopment options."

Karamjit Singh, CEO of Showsuite Consultancy, said: "The tender exercise attracted multiple competitive bids with the under-bidders falling close to the winning submission. It is after all, a rare opportunity to acquire a massive plot of elevated land for redevelopment. The entire estate would stand to benefit from the eventual harmonisation of the plot with it."