Frasers Property clinches The Centrepoint’s rear block in $391.9 million en bloc purchase

SINGAPORE – Frasers Property, through its wholly owned subsidiary Frasers Property Cuppage, was on Feb 26 awarded the collective sale tender for the leasehold rear block of The Centrepoint for $391.9 million, paving the way for a potential renewal of this stretch of Orchard Road.

This consolidates its ownership of the seven-storey landmark property in Singapore’s prime shopping belt, the property group said in a statement early on Feb 27.

Ms Soon Su Lin, chief executive of Frasers Property Singapore, said: “We are pleased to strengthen our ownership of The Centrepoint. This gives us greater flexibility to unlock the site’s long-term potential, including assessing broader rejuvenation plans for the area.”

The tender price translates to a land rate of about $2,577 per square foot per plot ratio, assuming full commercial use, and land betterment charges of $253.13 million for lease top-ups and intensification to a plot ratio of 5.6, marketing agent Savills said.

Developers pay a land betterment charge for the right to enhance the use of some sites or to build bigger projects on them.

This part of Orchard Road would benefit from a revamp and repositioning, Dr Chua Yang Liang, JLL’s head of research and consultancy, Southeast Asia, said. He noted that the last significant retail mall here was Orchard Gateway, completed in 2014, with Design Orchard as a smaller-scale incubator project opening in 2019.

But collective sale initiatives in recent years – including Ming Arcade, Delfi Orchard, Concorde Hotel, and now The Centrepoint – signal growing investor interest in rejuvenating this stretch.

“With rising competition from Kuala Lumpur, Bangkok and Jakarta, a refresh of Orchard Road is timely,” Dr Chua said.

“While Singapore may not compete on scale... the successful collective sale of The Centrepoint, especially if combined with Cuppage Terrace, could present a rare opportunity for large-scale redevelopment. At this scale, the impact would be transformative for the precinct,” he said.

Cuppage Terrace’s marketing agent CBRE told The Straits Times that it received “strong interest with over 50 inquiries to date from local and foreign developers, end-users, boutique real estate funds, ultra-high-net-worth family offices and corporates”. But it has yet to respond to queries on the results of Cuppage Terrace’s $250 million expression of interest exercise, which closed on Feb 12.

Regardless of whether the URA’s Strategic Development Incentive (SDI) scheme is leveraged, this project is likely to reshape the immediate surroundings in the near term, Dr Chua added.

The SDI encourages owners of commercial buildings to come up with a joint redevelopment proposal with their neighbours to transform the street or precinct.

Based on the agreed apportionment method, retail unit owners each stand to receive proceeds ranging between $840,000 and $9.29 million, while the apartment owners each stand to get between $2.65 million and $7.11 million per unit, subject to final adjustments.

The leasehold rear block forms part of The Centrepoint at 176A Orchard Road and comprises 66 retail units and 66 residential apartments under Management Corporation Strata Title Plan No. 1304. It occupies a prime site in Orchard Road with a direct sheltered link to Somerset MRT station.

The site has a land area of about 44,700 sq ft and is zoned “commercial”, with a gross plot ratio of 5.6 and a maximum height of up to 10 storeys.

This acquisition, the group said, further strengthens Frasers Property’s position in the Orchard Road area and its ability to maximise the potential of this well-located site, in line with national plans to rejuvenate the Orchard Road precinct.

Completed in 1983, The Centrepoint comprises two parts: a freehold front plot and a leasehold rear plot.

Before the collective sale for the rear plot, Frasers Property already held a majority stake in it, owning more than 52 per cent of the units by strata area. The developer is also the majority shareholder in the freehold front plot, owning about 96 per cent of the units by strata area.

In all, the group has developed more than 23,000 homes, and oversees a portfolio of 12 shopping malls in Singapore and six office and business space properties. 

Mr Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore, said: “The Centrepoint is our fifth successful collective sale along the Orchard Road belt, bringing our total transaction value in the precinct over the past five years to more than $2.69 billion.”

The other sales are Tanglin Shopping Centre, which was sold at $868 million; Ming Arcade at $172 million; Delfi Orchard at $439 million; and Concorde Hotel at $821 million.

The future redevelopment of these properties will help to transform Orchard Road from a traditional shopping belt into a must-visit vibrant and multifunctional lifestyle destination, he added.

The law firm of Rajah & Tann represented Frasers Property, while Wee Swee Teow LLP represented the vendors.

The completion of the acquisition is subject to the obtaining of a sale order approving the collective sale or receipt of consent from all subsidiary proprietors to the sale.