The third iteration of the Sultan Plaza resurfaced with a possible reduced reserve price of S$325m

Sep 08, 2022

Commercial property Sultan Plaza will relaunched again again on Friday, after its past 2 attempts failed to find a suitable buyer, said exclusive marketing firm Teakhwa Real Estate on Thursday (Sept 8).

The procedure to reduce Teakhwa Real Estate's reserve price to S$325 million, down from its previous S$360 million, is still in progress, according to Sieow Teak Hwa, the managing director of Teakhwa Real Estate. At this time, the additional agreement to decrease the reserve price has been signed by just 72% of the owners based on the total value of their shares.

At the proposed reserve price of S$325 million, the unit land pricing will be brought to S$1,545.80 per sq ft per plot ratio, inclusive of the expected expenses to acquire the state land, difference premium and the lease top-up premium. After taking into consideration an 8% bonus gross floor area (GFA), the plot price per square foot (psf) ratio will be 1,504.3 Singapore dollars.

The property underlying Sultan Plaza was granted a 99-year leasehold tenure beginning in May 1978, with a remaining lease period of about 55 years.

This is the second time that the property's reserve price has been revised. The previous revision, which took place in December 2021, brought the property's reserve price from S$380 million, which was announced during the property's attempt at a collective sale in 2019, down to S$360 million.

The property at 100 Jalan Sultan, which has been around for forty-five years and is located between Beach Road and North Bridge Road, is made up of 211 commercial units and 33 offices, for a total of 244 strata lots.

The land plot is approximately 52,471.3 square feet in size (sq ft). No extra buyer's stamp duty (ABSD) is required to be paid on the property since the Urban Redevelopment Authority's (URA) Master Plan 2019 categorises it as being suitable for commercial use.

It has a plot ratio of 5.0 and has the potential to be redeveloped up to 153 metres above mean sea level if it is elevated to that height.

In addition, the Singapore Property Authority had already granted a clearance in principle for a prospective sale of remaining state area bordering the site. The land in question is approximately 10,968 square feet in size. According to Teakhwa Real Estate, the site may potentially be expanded to about 63,439.8 square feet by including the state property, and the developer could potentially reconstruct the site to an estimated gross floor area (GFA) of 317,198.9 square feet.

Based on an outline planning permit advise from URA in 2019, a developer may pick from 3 redevelopment options: as a hotel, a business and residential complex, or a serviced apartment.

The land is being developed as a mixed-use community, with about 63,439.8 square feet dedicated to commercial use and approximately 253,759.1 square feet devoted to residential use. The total amount of commercial space on the site is approximately 63,439.8 square feet.

"We expect see stronger interest from developers this time round," said Sieow. "Strong sales and high selling prices were obtained for new buildings nearby such as The M, Midtown-Modern, and Midtown Bay."

According to Sieow, the closing date for the sale of the property through public tender will not be decided until there is confirmed interest from a potential buyer, or after it has obtained the 80 percent mandate from owners to sell it at a lower reserve price. Both of these milestones must occur before the date can be set in stone.