The freehold Nanak Mansions development in upmarket Meyer Road has been bought by an associate of UOL Group in a $201.1 million en bloc deal.
It was the fourth freehold residential site in the Meyer-Amber Roads vicinity to have come on the market this year.
UOL told the Singapore Exchange in a filing yesterday that its 50 per cent-owned associate, Secure Venture Development (No. 1), will redevelop the 10,185 sq m site, which has a gross plot ratio of 1.4.
"Meyer Road is a highly coveted address. Given its rare location right next to a park, we see the opportunity to develop this site into a luxury and spacious project which can be dubbed as our 'Nassim Residences of the East'," said UOL deputy group chief executive Liam Wee Sin.
The sale will be funded mainly by bank borrowings and internal resources.
There is also a private road next to the property of about 910 sq m in Jalan Nuri. This is owned by some subsidiary proprietors of the development and their associates.
These owners have been given a put option, which could result in Secure Venture having to acquire the road land at a yet-to-be-determined price if certain conditions are met, said UOL.
Nanak Mansions, a low-rise development completed in the 1980s, comprises 36 maisonettes, each with either four or five bedrooms. It is 400m from the upcoming Tanjong Katong MRT station on the Thomson-East Coast Line. The units belong to members and companies of a low-profile Singaporean Indian family, all of whom have consented to sell their units, according to a Business Times report earlier this month. The family developed Nanak Mansions but no family members live there. All 36 units have been rented out.
Mr Karamjit Singh, senior consultant at property consulting group JLL, noted that the site may be redeveloped into a five-storey project with a maximum gross floor area of 153,482 sq ft. This means it can accommodate a maximum of 203 units with an average size of around 700 sq ft in terms of gross floor area.
He said the $201.1 million price tag works out to $1,429 per sq ft per plot ratio (psf ppr), after factoring in development charges payable upon redevelopment. This is not far from the $1,409 psf ppr obtained in July for another property in Meyer Road, The Albracca, a 23,400 sq ft site sold for $69.1 million.
"Meyer Road is easily regarded as the best part of Singapore's East Coast," Mr Singh told The Straits Times, adding that this spells good potential especially for an upmarket development. The Nanak Mansions sale was marketed by JLL.
UOL said the acquisition will not have any material effect on the net tangible assets per share or earnings per share of the firm for the financial year ending Dec 31.
Shares of the group closed 0.6 per cent or five cents lower at $8.12, before the announcement was made.