SINGAPORE - Mixed-use development People's Park Centre in Chinatown has been put up for collective sale by public tender with a reserve price of $1.8 billion, three years after a previous attempt.
The reserve price for the site translates to a land rate of $2,620 per square foot per plot ratio (psf ppr), said its marketing agency ERA Realty Network on Wednesday (July 6).
The price factors in the differential premium and the premium to top up the land tenure to a fresh 99-year lease.
This is higher than the $1.35 billion it was aiming for in 2019.
Built in 1970, the commercial-cum-residential development sits on a 95,467 sq ft site, with a gross floor area of about 821,017 sq ft. It is zoned commercial under the Urban Redevelopment Authority's Master Plan 2019 with a gross plot ratio of 8.6.
The development, which is not earmarked for conservation, comprises a 13-storey and a 30-storey block, and has 324 shops, 256 offices, 120 apartments and a carpark.
The collective sale has obtained 84 per cent of the owners' signatures by strata area and 80 per cent by share value, ERA said.
Mr Koh Yam Khoon, chairman of the collective sale committee, said many owners were happy about the collective sale launch.
Mr Sunny Wong, who leads the ERA team handling the collective sale of the development, said: "The collective sale of People's Park Centre will provide a rare opportunity for developers to build an iconic building in the heart of a historical district in Singapore."
He added that it is not often that a major development in the city area, next to an MRT interchange, comes onto the market.
"We believe that this collective sale will attract both major developers and real estate funds," he said.
People's Park Centre is located near historical landmarks such as Upper Barracks and Chinatown Heritage Centre, malls such as OG Building and Chinatown Point, and schools including River Valley Primary School and Singapore Management University.
The tender for the site will close at 3pm on Aug 18.
This latest collective sale attempt comes after Golden Mile Complex was sold to a consortium for $700 million in May.
The consortium comprising Perennial Holdings, Sino Land and Far East Organization had said it was the first collective sale of a large-scale strata-titled conserved building in Singapore.
The iconic building, which was completed in 1973, was gazetted for conservation by the URA last year.
The reserve price for People’s Park Centre is the second highest for a collective sale launched since the Covid-19 pandemic, noted Huttons Asia’s senior director of research Lee Sze Teck.
The highest was for International Plaza in Tanjong Pagar, which relaunched for sale in April with a reserve price of $2.7 billion, working out to a land rate of $2,448 psf ppr.
“For any site that costs more than $1 billion, the risk is much higher and developers will be more cautious,” Mr Lee said, adding that he expects up to three consortiums to place bids.
Ms Tang Wei Leng, Colliers’ managing director and head of capital markets and investment services, said the price is on the high side in the current market environment, given patchy global economic recovery, supply chain disruptions, inflation and higher interest rates.
But she expects interest from consortiums of developers and financial partners.
“We think it could be too intense as a full commercial redevelopment and it is likely to do well with some residential or serviced apartment component,” she added.
Mr Lee said that its location on the fringe of the Central Business District could be the main draw for buyers, but noted that the building needs maintenance due to its age.
“If it goes through, it may give the nearby People’s Park Complex more confidence for collective sale,” he added.
