Tanjong Pagar will see the commencement of a collective auction for two buildings that are allocated for commercial use

Sep 27, 2022

In the prime Central Business District (CBD) of Tanjong Pagar, a pair of 5-storey buildings on Hoe Chiang Road and Lim Teck Kim Road will be launched for collective sale in the middle of November after recently achieving 80 percent consent from owners. Both of these roads are located in Tanjong Pagar.

The two buildings were constructed in 1959 and are located at 1, 3, 5, 7, and 9 Hoe Chiang Road as well as at 2, 4, 6, 8, and 10 Lim Teck Kim Road. They are situated on property that has a 999-year leasehold and have their backs facing each other. The land area on Hoe Chiang Road is 8,449 square feet, whereas the land area on Lim Teck Lim Road is 8,450 square feet.

According to Master Plan 2019, they have a gross plot ratio (GPR) of 5.6, which means that they are allocated for commercial use.

The combination of the two sites, in addition to the 1,643 square feet of state land that is located in between them, will bring the total land area up to 18,542 square feet. This will result in the formation of a relatively square plot of land, which PropNex believes will be ideal for the construction of a Grade A office development in the midst of the ongoing transformation that is occurring in Tanjong Pagar.

According to the sole marketing agency, the sites will be made available for collective sale at the same time after an activity that is now taking place to verify their gross floor area (GFA) is finished. A better understanding of the appropriate land improvement fee rate would be provided to prospective buyers as a result of this research.

At the moment, each of the two buildings has 20 residential units on the upper floors, in addition to the 5 commercial units on the ground floor.

According to Tracy Goh, head of investment and collective sales at PropNex, "the buyer can transform this site into a 35-storey building to realise potential gains from the plot ratio of 5.6." She also added that the site's 999-year leasehold tenure presents "a rare investment and redevelopment opportunity," while the site's commercial zoning means that there is no additional buyer's stamp duty imposed.

We believe that a 999-year leasehold Grade A office building located in the Central Business District (CBD) and in close proximity to the upcoming Greater Southern Waterfront zone offers the potential for strong capital appreciation in the years to come.

According to Goh, redevelopment projects that are now happening in the surrounding area, such as Newport Tower and Keppel Towers, also give further opportunities for future expansion.

The land that is slated for redevelopment is located in close proximity to the Tanjong Pagar MRT station, as well as the Cantonment and Prince Edward Road stations on the Circle Line, all of which are scheduled to open in the near future.

If the buyer wishes, they can submit an application to the relevant authorities to convert the land into a hotel or serviced apartment complex, however this is subject to permission.

The former Tower Fifteen, located just across the street from the Hoe Chiang building at number 15, is a commercial structure that will be placed up for sale in July of 2020 with a suggested selling price of S$715 million. The Fragrance Group, who now owns the land, has decided not to sell it and is instead in the process of redeveloping it into a hotel.

Based on written permission that was granted in November 2019, the freehold property measuring 39,337 square feet was given permission to be used for hospitality purposes with a GFA of about 248,483 square feet or an equivalent GPR of above 6.3.

After that, provisional authorization was given in the beginning of 2020. This made it possible for an additional 25 percent of GFA to be permitted for intended use on the site, together with auxiliary facilities and car parks of up to 37 storeys.

According to JLL, who acted as the marketing agency for the property's sale, this effectively boosted the GFA to about 310,604 square feet, which is comparable to a GPR of 7.896 under the CBD Incentive Scheme.