The Pearl Bank Apartments has been sold to CapitaLand for $728 million, making it fourth time lucky for the horseshoe-shaped condominium at Outram Park.
Owners of the 288 apartments, ranging in size from 1,323 sq ft to 3,993 sq ft, stand to receive between $1.8 million and $4.9 million from the private treaty collective sale. Owners of the eight commercial units, which vary in size from 700 sq ft to 5,630 sq ft, will potentially receive between $1.2 million and $6.9 million, said marketing agent Colliers International.
For developer CapitaLand, yesterday's sale would be its first residential land acquisition here since it bought a Government Land Sales site in June 2013 in Bukit Timah, where it is developing Victoria Park Villas.
The Pearl Bank deal, sewn up in the wee hours of yesterday morning, is not a one-off endeavour, said CapitaLand president and group chief executive Lim Ming Yan.
It is part of the group's plan to shore up a dwindling local residential pipeline amid an upturn in the local residential market, he added.
CapitaLand's offer for Pearl Bank Apartments matched the reserve price set by owners. This translates to a land price of about $1,515 per sq ft per plot ratio (psf ppr), after factoring in a $201.4 million premium for a lease top-up to a fresh 99-year tenure.
Subject to approvals, the site can be redeveloped into an 800-unit condominium project. The land acquisition is expected to be completed in July or August, and the new project may be ready for launch in the first half of next year.
"We are not paying over-the-top kind of price for the site," CapitaLand Singapore CEO Ronald Tay told reporters at the group's full-year earnings briefing.
"That is why we did not participate in the original tender. At that time, our assessment was that if anyone would go in, in the bidding situation, it would end up to be $1,600 to $1,700 (psf ppr). The math would not make sense for us," he said. "Given where the market is today, the break-even price we are talking about, there will be decent profit margin to be made."
The site, which is subject to the pre-application feasibility study on traffic impact, has a land area of 82,376 sq ft. Given the existing plot ratio of 7.45, it may be redeveloped into a residential development with a total gross floor area of 613,530 sq ft.
It is near Chinatown and minutes away from Outram MRT station as well as two major expressways.
The Outram precinct is also slated to become a healthcare, wellness and research hub under a 20-year redevelopment plan by healthcare group SingHealth.
Consultants are expecting a break-even price of $2,000 to $2,250 psf, and the average selling price to be around $2,400 to $2,600 psf.
"I think this is a good investment and will draw many buyers when launched," said Mr Lee Nai Jia, head of research at Edmund Tie & Company. "From anecdotal evidence, we observe that there are more buyers in their 30s purchasing homes in prime locations close to the Central Business District, and these buyers like areas that have a strong cultural identity."
The project is targeted to be completed by early 2023, right after the opening of the Thomson-East Coast Line - the third MRT line in the Outram area - which will make the commute to Shenton Way, Marina Bay and Orchard even more convenient.