This article was first published on Nov 27, 2014
Developers with an eye to an arresting chapter of Singapore's history are being invited to bid for the old Beach Road Police Station site.
The 99-year leasehold plot between Beach Road and Rochor Road has been released under the reserve list of the second half 2014 Government Land Sales programme. That means the 2ha plot will go to tender only if a developer initially commits to buy the plot for an acceptable minimum sum.
The successful bidder will be required to conserve and restore the former police station building.
The site can also accommodate a development of up to 45 storeys, with a gross floor area of about 88,000 sq m. About 70 per cent of this will have to be set aside for office use.
JLL head of South-east Asia research Chua Yang Liang noted that while the conserved building could be challenging, it gave a developer a "unique opportunity" to feature a mixed development comprising office, retail and possibly residential spaces at such a site. "It is likely to motivate larger developers to launch a flagship development, leaving their mark on the Singapore skyline," he said.
He added that as the total cost is large - an estimated $1.1 billion to $1.4 billion ($1,300 to $1,400 per sq ft per plot ratio) - it is most likely to attract the larger property players.
"Foreign developers such as the Chinese firms looking to penetrate into the commercial market may find this site attractive."
Developers could be interested as office rents in the area, including Suntec City and Marina Square, have been holding up, said R'ST Research director Ong Kah Seng. Leasing demand in the area has been mainly from firms outside the financial industry, including IT and professional services, and mining companies - businesses which are less affected by global economic fluctuations and thus "more resilient" in space requirements and operations.
Apart from nearby mixed development South Beach, which will be completed next year and offer 500,000 sq ft of office space, new office space in the area has been limited for a long time, so demand at this new site could be solid, he said.
However, the site will also have to contend with mixed development Duo, which includes Duo Residences, offices, retail space and a five-star hotel, and will come onstream in 2016, said Century 21 chief executive officer Ku Swee Yong.
"At this cycle of the market, where new demand for retail and office space is weak, I am not sure if it would be triggered," he said, referring to the sale of the Beach Road site.