Far East Shopping Centre debuts collective sale at $928 mil
By Cecilia Chow
/ EdgeProp Singapore |
The strata-titled owners of Far East Shopping Centre are attempting their first collective sale (Photo: Albert Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - Far East Shopping Centre at 545 Orchard Road will be launched for collective sale by marketing agent CBRE at $928 million on July 25. The strata-titled commercial complex, built in 1974, has a five-storey retail podium comprising 216 strata-tilted shops, a 10-storey office block with 80 strata-titled office units and two strata-titled basement parking levels.
It was known for retail shops selling consumer electronics and golf equipment. House of Hung Jewelleries, a family-run jewellery business, has been there since 1975. Shashlik Restaurant, a Russian-Hainanese restaurant, has been on the sixth floor of Far East Shopping Centre for over 30 years. Today, the shops are mainly occupied by travel agencies, money changers, tattoo studios and beauty salons.
Developed by the Ng family-controlled Far East Organization, one of the major stakeholders on Orchard Road, the 298-unit strata-titled, mixed-use development cost $20 million to build. Far East Shopping Centre was considered the most prominent commercial complex in the area in the 1970s. It was built in response to the Singapore government's call to develop Orchard Road into a prime shopping and tourist strip. The developer still has a stake of over 30% in the building in terms of share value. (Find Singapore commercial properties with our commercial directory)
The property at 545 Orchard Road sits on a 36,014 sq ft site with a 999-year lease from 1871 and is zoned for commercial use. It has a 75m frontage along Orchard Road and a 55m frontage along Angullia Park in prime District 9.
Far East Shopping Centre has a 75m frontage along Orchard Road and a 55m frontage along Angullia Park in prime District 9 (Photo: Albert Chua/EdgeProp Singapore)
Earmarked for redevelopment
As it nears 50 years, Far East Shopping Centre has been identified as one of six buildings on the stretch of Orchard Road – between Cuscaden Road and Orchard Boulevard – that the URA wants to see redeveloped into "a new exciting destination".
The other five buildings are Hotel Properties Ltd's (HPL) Voco Orchard Singapore, Forum the Shopping Mall and HPL House; Wharf Estates Singapore's Wheelock Place; and Bonvests Holdings' Liat Towers.
Under the Strategic Development Incentive (SDI) Scheme in April 2021, URA will offer 20% bonus gross floor area (GFA) to owners who redevelop their properties jointly with at least one of their neighbours to create "a new destination". Besides an increase in GFA, the new owners enjoy flexibility in land use and building height.
Last month, HPL reportedly submitted a redevelopment proposal for its Orchard Road assets, namely Voco Orchard Singapore, Forum The Shopping Mall and HPL House under the SDI Scheme (Photo: Albert Chua/EdgeProp Singapore)
Last month, HPL reportedly submitted a redevelopment proposal for its Orchard Road assets under the SDI Scheme to URA to redevelop Voco Orchard Singapore, Forum the Shopping Mall and HPL House.
The Far East Shopping Centre site at 545 Orchard Road has an allowable gross plot ratio (GPR) of 4.9 and a maximum height of 30 storeys under the 2019 Master Plan. The verified existing GFA is about 242,145 sq ft, equivalent to a plot ratio of 6.72. Under the SDI Scheme, the maximum potential GFA is 20% higher at 290,574 sq ft, with the GPR equivalent to 8.06.
The $928 million guide price indicated by CBRE works out to $3,421 psf per plot ratio based on the GFA of 290,574 sq ft under the SDI Scheme, assuming full commercial usage. No additional buyer’s stamp duty is payable as the site is currently zoned for commercial use.
CBRE's Tay: it's a short-fuse collective sale, as we have to launch the collective sale and sell the site by the end of the year so that the buyer has time to submit the Outline Planning Permission [OPP] for the new integrated development to URA (Photo: Albert Chua/EdgeProp Singapore)
'Short-fuse collective sale'
Far East Shopping Centre's collective sale process kicked off in June last year, and by June 24 this year, it had gained the support of 80% of the strata-titled unit owners. "In a normal collective sale process, we have one year to sell," says Michael Tay, head of Singapore capital markets, CBRE. "In this instance, it's a short-fuse collective sale, as we have to launch the collective sale and sell the site by the end of the year so that the buyer has time to submit the Outline Planning Permission for the new integrated development to URA."
To qualify for the SDI Scheme, URA has stipulated that "all relevant property owners" of 545 Orchard Road and the adjacent properties have to submit a joint Outline Application for a joint redevelopment proposal by Dec 31, 2023. They must obtain the relevant Provisional or Written Permission by Dec 31, 2024.
The future buyer of Far East Shopping Centre could choose to redevelop the property with its two neighbouring sites – Voco Orchard Singapore or Liat Towers. Under the SDI scheme, the new development can have a direct underground pedestrian link from Orchard MRT Station, which will "significantly increase footfall to this part of Orchard Road", according to CBRE's Tay.
"Far East Shopping Centre is the only commercial site available for sale along Orchard Road," says Tay. He adds that buyers could explore different land uses such as retail, hotel, residential, serviced apartments, MICE facilities and lifestyle uses under the SDI Scheme.
Far East Shopping Centre is to be redeveloped jointly with Liat Towers (left) or Voco Orchard Singapore for the owners to enjoy the SDI Scheme (Photo: Albert Chua/EdgeProp Singapore)
999-year leasehold lux residences on prime Orchard Road?
The property could be redeveloped into a new mixed-use development with retail, hotel and luxury residences. "Even though residential may not be the highest and best use because of the 60% additional buyer's stamp duty that foreigners have to pay, it would be the first 999-year leasehold luxury residential development along the Orchard Road thoroughfare," notes Tay. "And it should attract both local and foreign ultra-high net worth individuals."
The only other luxury residential development right in the heart of Orchard Road is the 175-unit, 55-storey The Orchard Residences, which is part of a mixed-use development that includes Ion Orchard shopping mall, which is integrated with the Orchard MRT Station in the basement. Singapore's CapitaLand and Hong Kong's Sun Hung Kai Properties jointly developed the 99-year leasehold, mixed-use project.
The luxury apartments at The Orchard Residences were launched in March 2007, and four penthouses there were sold at prices from $5,000 to $5,600 psf later that year. Based on caveats lodged, the latest transaction at The Orchard Residences was for a 2,174 sq ft three-bedder on the 35th floor that changed hands for $6.7 million ($3,018 psf) in February.
At the 338-unit Scotts Square, a freehold development sitting on prime Scotts Road, just off Orchard Road, the latest transaction was for a 947 sq ft two-bedder on the 25th floor that changed hands for $2.9 million ($3,062 psf). The freehold development by Wharf Estates Singapore was completed in 2011.
Far East Shopping Centre at 545 Orchard Road is zoned for commercial use and flanked by Voco Orchard Singapore and Liat Towers (Source: EdgeProp Landlens)
Check out the latest listings near Far East Shopping Centre, Angullia Park, The Orchard Residences, Scotts Square, Orchard MRT Station
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