Sim Lim Square, Singapore's well-known tech shopping mall in Rochor Canal Road, was yesterday put up for collective sale via public tender with a reserve price of $1.25 billion.
Its 423 owners stand to receive between $488,000 and $67.5 million each if the sale is successful, said marketing agent SLP Scotia.
More than 80 per cent of the owners consented to sell on March 11 after the initial asking price of $1.1 billion was raised to $1.3 billion in February.
SLP Scotia said in a statement yesterday that developers can explore converting Sim Lim Square into a mixed-use development with a hotel and office space, because of its "unique and strategic location" in the Ophir-Rochor Corridor, which is touted to be an extension of the downtown area.
The mall was built in 1985 and has 63 years remaining on its 99-year lease. The 78,152 sq ft site houses 492 commercial units on six floors and two basement levels.
Mr Vikas Gupta, chairman of the collective sale committee, believes the site can be better used.
"(It is) currently heavily under-utilised and the strata system does not allow Sim Lim Square to utilise the spare space. It's the ideal time to refresh Sim Lim Square," he said.
The last gross floor area figure approved by the Urban Redevelopment Authority (URA) is 391,000 sq ft, according to the SLP Scotia statement. The site is also zoned for commercial use with a plot ratio of 4.2, it added.
"Interested developers could explore converting Sim Lim Square to other uses, taking advantage of the latest URA incentive scheme - the Strategic Development Incentive Scheme," said SLP Scotia.
The scheme, announced during the URA's launch of its Draft Master Plan last month, is intended to encourage the redevelopment of older buildings in strategic areas into new, bold and innovative developments that will positively transform the surrounding urban environment.
SLP Scotia added that while the scheme is intended for the amalgamation of different plots of land, it is confident that an exception can be granted for the Sim Lim Square site as it is large enough.
Industry observer Sing Tien Foo, an associate professor at the National University of Singapore's real estate department, said the $1.25 billion reserve price, which translates to $3,197 per sq ft per plot ratio (psf ppr), is on the high side.
The collective sale attempt also comes amid a challenging time in the market, he added.
But he noted the mall's unique location and proximity to the Civic District, as well as places like Tekka and Kallang, which are undergoing transformation.
"The development can be an interesting focal point for the area. There's some potential, but the developer will really have to intensify the land use," he said, adding that one way to do this is to have a mixed-use project to optimise rental.
The collective sale bid comes on the back of the transaction of freehold Golden Wall Centre, also in Rochor. That site was sold for $276.2 million ($2,331 psf ppr) last November.
The Sim Lim Square tender will close at 3pm on June 24.