Sultan Plaza makes second bid to sell en bloc for $360m

Commercial building Sultan Plaza is trying its luck at a $360 million collective sale for a second time.

The 45-year-old property in Jalan Sultan will be relaunched today at the same reserve price, after a previous tender closed on March 3 with no buyers. Its first attempt to sell en bloc in 2019 was at $380 million.

The 52,471 sq ft commercial-zoned site comprises 211 commercial units and 33 offices, totalling 244 strata lots. If the sale is successful, shop owners will each stand to get between $162,900 and $46.3 million, while owners of offices will receive between $619,800 and $2.05 million, Mr Sieow Teak Hwa, managing director of marketing agent Teakhwa Real Estate, told The Straits Times.

In-principle approval has been given by the Singapore Land Authority for a potential sale of remnant state land of about 10,968 sq ft adjoining the site. The plot can be expanded to about 63,439.8 sq ft and redeveloped to a gross floor area (GFA) of 317,198.9 sq ft.

Apart from commercial use, there are other redevelopment options. The site can be redeveloped for mixed use, with 40 per cent floor area for commercial use and 60 per cent for residential. The price will work out to a land rate of $1,548.7 per sq ft per plot ratio (psf ppr) including estimated costs to buy the state land, a 7 per cent bonus balcony gross floor area, differential premium and lease top-up premium, Mr Sieow said.

It can also be redeveloped into a 700-room hotel with shopping and commercial space. For a hotel with 20 per cent commercial floor area, the land rate will work out to $1,629.4 psf ppr, including estimated costs to buy the state land, differential premium and lease top-up premium, he said.

There is no additional buyer's stamp duty payable for the commercial site, whose tender will close on June 28 at 3pm.

Located near the Nicoll Highway and Lavender MRT stations, the site is also close to Marina Bay, Bugis Junction, Raffles Hotel and the Kampong Glam district.

So far this year, there have been three commercial collective sale deals totalling $1.62 billion in value compared with just one for the same period last year - that of Maxwell House, which sold for $276.8 million. For the whole of 2021, commercial en bloc deal value totalled $926.8 million.

The latest property cooling measures could also have shifted investor demand to the commercial market, Mr Wong Xian Yang, head of research at Cushman & Wakefield said.

The mega sales of Golden Mile Complex ($700 million) and Tanglin Shopping Centre ($868 million) boosted market sentiment. "We anticipate more projects to launch amid a tight commercial and residential market," he said.

Developers and investors remain confident in the local property market due to the country's stable economic outlook and a limited supply of prime commercial space.

This is reflected in the recovery of the commercial rental market.

He noted that office rents in the central region rose 1.6 per cent in the first quarter this year from the previous three months. "While central region retail rents fell by 0.4 per cent in Q1 2022, we anticipate retail rents to return to growth this year, given the re-opening of borders and relaxation of safe distancing measures," he added.