Golden Wall Centre at 89 Short Street has relaunched its second en bloc attempt announced the sole marketing agent Edmund Tie & Company (ET&Co). ET&Co said that based on the existing gross floor area of 11,007.929 square metres (sq m), URA has advised that hotel use at Gross Plot Ratio 4.88 can be allowed on the second en bloc attempt site, subject to compliance of conditions and requirements.
The second en bloc attempt site, Golden Wall Centre, is a prime freehold commercial property with a land area of approximately 2,251.9 sq m (24,239 sq ft) and is zoned for Commercial use under Master Plan 2014.
The second en bloc attempt site enjoys an excellent location at the fringe of the city centre and is within proximity to the arts, heritage and cultural districts. It is conveniently located at the doorstep of Rochor MRT station on the Downtown Line and within 400 metres to Little India MRT interchange, connecting the Downtown and North East Lines. The second en bloc attempt site occupies a prominent corner plot with a 180-metre triple frontage boasting high visibility along the main thoroughfare of Rochor Canal Road, as well as Short Street and Albert Street.
Located within the Beach Road/Ophir-Rochor Corridor which is envisioned to be a vibrant mixed-use cluster under Master Plan 2014, Golden Wall Centre stands to benefit from the ongoing rejuvenation and transformation of the area. Such transformations can be exemplified with new developments such as DUO and Tekka Place – a retail mall with 320 serviced residences directly opposite the property.
Senior director of investment advisory Swee Shou Fern commented: “Golden Wall Centre presents a unique and exceptional opportunity to develop a landmark commercial project with prominent frontage. It can either be developed into corporate headquarters with potential naming and signage rights for the building, or for strata sale in a market where freehold strata retail and office properties next to MRT stations are rarely available for sale.
“With its strategic city fringe location and proximity to the arts, heritage and cultural districts, the property is also ideal for a mid-sized hotel development.”
The reserve price for the second en bloc attempt site is $260 million, which reflects $2,194 per square foot per plot ratio (psf ppr).
The tender exercise for the second en bloc attempt site will close on Friday, 23 November 2018 at 3pm.
Golden Wall Centre attempted an en bloc sale in 2016 with a guide price of $250 million to $270 million in 2016 which was unsuccessful.
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.
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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