SINGAPORE - The landmark Tanglin Shopping Centre in the Orchard Road area has been sold in a collective sale for $868 million after three failed attempts.
The buyer – a developer held by Indonesian billionaire Sukanto Tanoto’s pulp, paper and palm oil giant Royal Golden Eagle (RGE) – paid $40 million above the guide price, and about 10 per cent over its $785 million reserve price, noted marketing agent Savills Singapore.
The $868 million price for the freehold 364-unit commercial complex works out to $2,769 per square foot per plot ratio (psf ppr) based on the gross floor area (GFA) of 313,435 sq ft and assuming full commercial usage.
Mr Len Hoo, 71, who has been chairman of the mall’s collective sale committee since its first attempt in 2007, said: “10 per cent above the reserve price is reasonable.”
Mr Hoo of jeweller C.T. Hoo, owns a 300 sq ft shop and an 800 sq ft office unit in the complex.
The last three collective sale attempts were in 2007, 2011 and 2017. The 2011 attempt had a reserve price of $1.25 billion that was not met.
“Even though we didn’t get $1.25 billion this time, we are now dealing with the pandemic. Visitor footfall has dropped, business has slowed. This is a 50-year-old building and we need to spend a lot on maintenance and renovations,” said Mr Hoo.
Owners of retail units ranging from 300 sq ft to 500 sq ft stand to get between $1.5 million and $3.5 million, while owners of offices between 300 sq ft and 1,500 sq ft are in line for $900,000 to $4.5 million, he added.
Ms Hau You Ling, one of the second-generation family owners of Indonesian restaurant Tambuah Mas, said they are “quite happy" the sale went through. In addition to the restaurant, the family owns other units at the mall.
“This is our first and biggest restaurant, and we have been here for more than 40 years. It’s time for rejuvenation,” she told The Straits Times.
“Doing business has been quite challenging, due to pipe chokage, lifts and elevators breaking down sometimes. If the sale didn’t go through, we would have had to do major renovation. At least we have some closure now.”
The buyer is Pacific Eagle Real Estate, a Singapore-based property investor and developer privately held by the Tanoto family.
Mr Tanoto, ranked by Forbes as one of Indonesia’s 50 richest billionaires in 2021, owns RGE, a group with businesses in natural fibres, edible oils, green packaging and natural gas.
Pacific Eagle Real Estate director Sun You Ning said: “Tanglin Shopping Centre is one of Singapore’s earliest retail landmarks and occupies a prominent location next to the St Regis Hotel in the Orchard Road enclave.”
Pacific Eagle bought Chinatown Plaza en bloc for $260 million in 2018 and is now redeveloping it into Mondrian Singapore Duxton, a luxury hotel.
Tanglin Shopping Centre is a 12-storey complex with two basement levels and an annex eight-storey carpark. Its main complex was completed in the 1970s, while the office tower extension was finished in the early 1980s.
A unit of City Developments' (CDL) hotel arm Millennium & Copthorne Hotels (M&C) owns around 34 per cent of Tanglin Shopping Centre, or 85 strata-titled lots.
CDL group chief executive Sherman Kwek said: “This marks another successful outcome following our privatisation of M&C in 2019 and is in line with our capital recycling initiatives to unlock the potential of our asset portfolio.”
Mr Jeremy Lake, managing director of investment sales and capital markets at Savills, said the tender for the mall was keenly contested, adding that developers will have several development options ranging from offices to luxury retail, residential and hotel.
The 68,512 sq ft freehold site is zoned commercial, with 60 per cent of the total GFA for commercial use and the remaining 40 per cent for residential and/or hotel uses.
The commercial zoning means there is no additional buyer’s stamp duty payable.