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Rare freehold commercial development in Pasir Panjang up for en bloc sale of $57 million

by • November 2, 2018 • EnblocComments (0)142

Knight Frank on Nov 1 announced the collective sale of a rare freehold commercial development in Pasir Panjang. Knight Frank the exclusive marketing agent representing the interests of all owners in Century Warehouse, said the sale of Century Warehouse, an exclusive freehold industrial “B1” development along Pasir Panjang Road, has a total strata area of 56,539 sq ft.

Century Warehouse is an 8-storey freehold industrial warehouse with basement carpark, comprising 35 strata units. The rare freehold commercial development sits on a site with an area of 2,824.4 sqm (approx. 30,402 sq ft) and is regular with a frontage of approximately 35 metres onto Pasir Panjang Road, and average depth of 82 metres.

According to the 2014 Master Plan, the rare freehold commercial development is zoned “Industrial (B1)”, with an allowable Gross Plot Ratio (GPR) of 2.5.

Century Warehouse is nestled within an exclusive industrial enclave, surrounded predominately by other industrial developments such as Interlocal Centre and OC @ Pasir Panjang, as well as Mapletree Business City. The rare freehold commercial development is approximately a 10-minute walk to both Pasir Panjang MRT and Labrador MRT Stations and enjoys easy access to major arterial roads and expressways such as the West Coast Highway and Ayer Rajah Expressway.

The owners of the rare freehold commercial development are expecting offers in the region of $57 million for the site, which translates to a land rate of S$750 psf ppr.

Mr Tan Boon Leong, Executive Director and Head of Industrial, Knight Frank Singapore, said: “This is a rare freehold site available for sale and with 100% consensus obtained from all subsidiary owners to sell, potential buyers will find this an attractive investment.”

Mr Ian Loh, Executive Director and Head of Investment and Capital Markets, shares added: “Knight Frank is proud to be the marketing agent for Century Warehouse. Located in an exclusive industrial area and just 10 minutes’ drive away from the CBD, we believe this will be an attractive industrial opportunity for owner occupiers, developers and funds.”

The tender for the rare freehold commercial development, Century Warehouse, will close on 30 November 2018, at 3.00 pm.

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Mr Paul Ho, chief mortgage consultant of iCompareLoan said owners of rare freehold commercial development going en bloc have to act quickly and decisively.

En Bloc Sales Process Singapore – A Definitive Step-by-step Guide

With the winding down of the success of residential en bloc sales, commercial properties are now trying to join in the bandwagon. Many commercial en bloc sale attempts fail because the asking prices are often too high. Two critical factors affecting the success of commercial sites going en bloc are pricing and location. Older commercial buildings especially, may see a need to catch the current wave as an exit strategy as their rental yields come under pressure due to competition from newer commercial buildings.

And whatever decision owners facing en bloc sale make, it is better to make it fast so that the sale (or non-sale) can be concluded with minimal delay and maximum benefit to the owners. One way he said was to conduct a Collective Sales Agreement (CSA) as well as concurrently collect a “Non Collective Sales Agreement (NCSA)”, so that once a NCSA reaches 20%, the collective sale process is called off. There is really no point to drag on.

As collective sale process takes 20 to 30 months to complete, during this time, the owners typically do not have sufficient funds for down-payment and their CPF OA funds are tied up in the property, hence they cannot buy a new property early.

By the time the transaction is completed in 20 to 30 months later, the property prices would have already moved  up 10 to 20 per cent. This is already evidenced by sellers of older estate asking higher prices. Hence if the process takes 20 months to 30 months, owners may need to consider the cost of a replacement unit by that time, else they may want to hold up a higher selling price.

rare freehold commercial development

Collective sale rules are quite onerous and stringent and is governed by the Land Titles (Strata) Act – section 84A. Over the years, additions and amendments by the Ministry of Law to the en bloc law have made the collective sale rules even tighter.

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