High Street Centre gets offer of under S$700 million for collective sale

This is the latest en bloc attempt for owners of the 99-year leasehold development

Jun 27, 2024

HIGH Street Centre has received an offer of under S$700 million, more than 6 per cent below its reserve price of S$748 million, after its en bloc sale tender closed on Monday (Jun 24).

The owners are now in the midst of collecting signatures to get an 80 per cent mandate to cut the reserve price. Currently, around 65 per cent of them are in favour of the change.

Marketing agent Cushman & Wakefield declined to confirm the offer price or the identity of the prospective buyer.

This is the latest collective sale attempt for owners of the 99-year leasehold development.

It was first put up for sale in June 2020 at a reserve price of S$800 million. The tender was relaunched in October 2023 at a S$S748 million reserve price, 6.5 per cent lower than the previous attempt. It closed in January without any bids meeting the reserve price.

In the latest attempt, Cushman & Wakefield said that although the reserve price remained at S$748 million, plans were underway to lower the price to below S$700 million.

Christina Sim, the consultancy’s senior director of capital markets, said: “While the market for residential properties is challenging considering the steep increases in Additional Buyer’s Stamp Duty announced on Apr 27, High Street Centre offers the only commercial opportunity that has the flexibility of incorporating a hotel or serviced apartment component within the development.”

She added: “Further, the scarcity of commercial development sites in and around the City Hall District has placed a premium on rents for exclusive office space.”

The consultancy had noted earlier that the Urban Redevelopment Authority will support the development of at least 60 per cent of the site’s 466,085 square feet (sq ft) of gross floor area for commercial use. This may comprise a mix of office and retail, including food and beverage.

Some 40 per cent may be allocated for the redevelopment of a hotel of no more than 450 keys, or for residential or serviced apartment use.

The original reserve price of S$748 million works out to S$2,164 per square foot per plot ratio (psf ppr), should the buyer use the 40 per cent quantum for residential use. Should it be used for hotel purposes, the land rate then translates to S$2,290 psf ppr. This sum includes the payment of a land betterment charge, as well as a premium to top up the lease to a fresh 99 years.

A lower offer of S$700 million would then work out to around S$2,000 psf ppr, should the buyer use the 40 per cent quantum for residential use, or about S$2,100 psf ppr should it be used for hotel purposes.

As the site is zoned “commercial”, either option for the use of the 40 per cent quantum will not incur an Additional Buyer’s Stamp Duty.

Located at 1 North Bridge Road in Singapore’s Civic District, High Street Centre sits on a site spanning 60,298 sq ft with an allowable gross plot ratio of 7.72. The 30-storey mixed-use development houses about 430 strata-titled units, including offices, retail units and residential apartments.

https://www.businesstimes.com.sg/pro...ollective-sale