Sultan Plaza up for collective sale with $360m reserve price

Sultan Plaza's land has a 99-year leasehold tenure starting May 1978, leaving a balance lease term of about 56 years. PHOTO: TEAKHWA REAL ESTATE

SINGAPORE (THE BUSINESS TIMES) - Commercial building Sultan Plaza has been put on the market again, in what is likely the property market's first collective sale attempt since the latest cooling measures kicked in, sole marketing agent Teakhwa Real Estate told The Business Times.

This time round, its reserve price has been lowered to $360 million, from $380 million in the previous collective sale attempt in 2019.

Situated between Beach Road and North Bridge Road, the 44-year-old property at 100 Jalan Sultan comprises 211 commercial units and 33 offices, totalling 244 strata lots.

The squarish site spans 52,471.3 square feet. As it is zoned for commercial use under the Urban Redevelopment Authority's (URA) Master Plan 2019, no additional buyer's stamp duty (ABSD) is payable.

It has a plot ratio of 5.0, and may potentially be redeveloped up to a height of 140m above mean sea level, or about 30 to 35 storeys, said Teakhwa Real Estate.

Based on an outline planning permission advisory from URA in 2019, a developer may choose from three redevelopment options: as a hotel, a commercial and residential development, or a fully commercial building.

As a mixed-use development, it may have a gross floor area (GFA) of up to 262,356.4 sq ft, with 40 per cent for commercial use and 60 per cent for residential use. That translates to some 104,942.5 sq ft of commercial space. The remaining 157,413.8 sq ft may yield about 172 residential units at an average size of 915 sq ft each, subject to approval from the authorities, the marketing agent noted.

Alternatively, the site could be redeveloped into a 700-key hotel, with commercial space taking up 20 per cent of the GFA or around 52,471.3 sq ft.

Sultan Plaza's land has a 99-year leasehold tenure, starting in May 1978, leaving a balance lease term of about 56 years.

For a new mixed-use project, the reserve price of $360 million will reflect a unit land rate of $1,626 per square foot per plot ratio (psf ppr), including the bonus balcony floor area, the estimated differential premium and a lease top-up premium, Teakhwa Real Estate said.

For a hotel development, the land rate works out to $1,733 psf ppr, the firm added.

Among the fresh property curbs introduced last Thursday (Dec 16) was a higher ABSD rate of 35 per cent for developers, up from 25 per cent previously. That is expected to dampen demand for collective sale sites and slow the robust buying momentum from recent months.

Teakhwa Real Estate told BT: "Most developers are still likely to acquire land, as their current stocks are running low, but will probably pick mid-sized and more reasonably priced sites, especially those within a price range of $200 million to $500 million."

Well-located residential or mixed-use sites with unique features that cater more to Singaporean buyers - who are the least affected by the new measures - will stand a good chance of finding a buyer, the marketing agent noted.

It added that Sultan Plaza could garner strong interest due to the "reasonable asking price and palatable quantum which hits the sweet spot".

"With strong sales from nearby developments such as The M, Midtown Modern and Midtown Bay, we are expecting keen competition from developers."

Meanwhile, other sites also continue to gun for collective sales despite the new cooling measures. They include The Beaumont, Chuan Park Condominium, Sixth Avenue Centre, Baode Building and Tanglin Shopping Centre, BT earlier reported.

Sultan Plaza, in downtown District 7, is near landmarks and attractions such as Marina Bay, Bugis Junction, Raffles Hotel, the Formula One race circuit, and the vibrant Kampong Glam district, which has street art, trendy boutiques and themed cafes. The Nicoll Highway and Lavender MRT stations are a seven- to eight-minute walk away.

"The subject site has an excellent shape, size and attributes that allow more design flexibility and will lower the costs in building the final product," Teakhwa Real Estate said.

It added that if the site is redeveloped, most of the apartments there will have privacy as well as city and bay views.

More than 80 per cent of the owners have consented to a collective sale, just eight weeks after their extraordinary general meeting in early October 2021.

The collective sale committee has appointed Legal Solutions LLC as its lawyer.

Sultan Plaza's en bloc tender is scheduled to close on Feb 10, 2022 at 3pm.

Join ST's Telegram channel here and get the latest breaking news delivered to you.