A buyer has been found for the Tai Wah Building on Killiney Road. The commercial complex has been bought by private equity investment firm Lucrum Capital. Lucrum, a company focused mainly on real estate in the Asia-Pacific region, placed the top bid of S$84.89 million for the development.
The final sale price is roughly 5% higher than the asking price of S$81 million, and translates to approximately S$2,209 per square foot per plot ratio.
Lucrum Capital has purchased the property with plans to redevelop it into a serviced apartment complex with commercial areas on the first storey.
Edmund Tie & Company (ET&Co) – the marketing agent for the sale – were unable to release the total number of bidders for the complex. They were also unable to confirm whether or not Lucrum Capital was the highest bidder.
The four-storey Tai Wah Building was completed in the mid-1980s. It currently contains 2 shops and 6 residential apartments, but this could change with the upcoming development. The building sits on freehold land with a total area of about 13,148 square feet. Under the zoning Master Plan 2014, the freehold site is zoned for “residential with commercial at first storey”.
The site can be redeveloped in the future, subject to approval from the relevant parties, up to maximum floor area of around 38,414 square feet. This is above the allowed plot ratio of 2.8 indicated in the 2014 Master Plan.
ET&Co said that an application for the development of a serviced apartment complex with first storey commercial use has been submitted. This application has received in-principal approval from the relevant parties.
Another mixed-use development, the Jalan Besar Plaza in Kallang, is yet to find a buyer, despite being launched on the same day as the Tai Wah Building with a November 10 tender close date.
Hutton Asia head of investment sales, Terence Lian, said that: “There has been interest from a number of developers, and we are currently negotiating with them to try and reach an agreement.”
He also said that the issue was the land use, rather than the price of the property.
Whoever purchases the building has the option to redevelop it with a mixture of residential, serviced residential, and commercial areas. The asking price for the building was S$390 million.