URA Gives Conservation Status to Golden Mile Complex Site, Incentives Given to Attract Developers for En Bloc Sale

URA Gives Conservation Status to Golden Mile Complex Site

Incentives Given to Attract Developers for En Bloc Sale

In news that would excite the conservationists in Singapore, the Urban Redevelopment Authority announced that the iconic Golden Mile Complex shall be conserved.

The historical structure that has terraced facade facing towards the Nicoll Highway will be conserved given its historical and architectural importance.

According to the announcement made by the URA, the decision to conserve this building was arrived at after two-year study and the process has started to have this structure gazette as a conserved building.

In their bid to ensure that this decision will not constrain a future en bloc sale, the Urban Redevelopment Authority in a surprise move, is offering additional planning incentives to the developers.

This includes increase in floor area by one-third and also development charge waiver. They have also kept the option for the adjustment of the boundary for this 1.3-hectare site.

The developers on their part would have to strictly adhere to the guidelines for conservation.

This includes the clause to retain the landmark structure in the main building. This iconic stricture with its stepped terraced above the podium faces the Nicoll Highway.

Developers shall also have to retain the stepped profile of the building and the plinth-like structure that faces the Beach Road.

However, the URA also assured developers that creative design ideas that are aligned to the historic structural and architectural character shall be considered.

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It is interesting to note that this decision to conserve the complex which is 47-year old has been taken after two collective sale attempts had been unsuccessful.

The owners had launched the tender for S$800 million on both occasions but the property failed to attract any bids.

What Are the Incentives?

Among the incentives that has been announced by the URA for the proposed redevelopment includes the increase of Gross Plot Ratio of the property.

The one-third increase in its floor area would offer developers to add another 30-storey tower to this site. This has been proposed over the existing multi-storey carpark that sits alongside the main structure.

In its release the URA announced that a part of the development charges for the additional floor area shall also be waived off with a maximum cap of 10% of the development’s market value or 10% of the land value based on the existing development charge rate whichever is lower.

This will be subject to the approved mixed-use of the development. Apart from this the developers would also have the option to tweak the boundary of the site to achieve a more regular-shaped plot that would optimize the layout of the new development.

It needs to be mentioned here all these would come along with the usual planning incentives that are offered for conserved buildings.

These include 99-year lease top up and waiver on the increase in development charges owing to change in the site’s use.

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There are more than 7000 sites in Singapore that have been gazette for conservation and most of them are located in Little India, Chinatown and Kampong Glam areas.

In its official release the Urban Development Authority stated that Golden Mile Complex is an architectural marvel and stands testimony to the engineering ingenuity of that generation of Singapore’s buildings.

It captures the bold imagination and vision of a bygone era. This property is a legacy of the national building days in Singapore.

Decades later it continuous to be a unique landmark for Singaporeans and encapsulates the can-do spirit of the people and the society in the immediate years of independence.

URA arrived at the decision to conserve the Golden Mile Complex based on the inputs it received for this strata-titled property from different stakeholders over a period of two years.

These include several industry players and conservationists.

According to the 2014 Master Plan, the 16-storey property on Beach Road that has 718 units at present has been zoned for commercial use.

Completed in 1973 this site still has 48 years in lease balance. It was one of the first mixed-use developments in Singapore that had residential units, shops and offices.

If and when this property finds itself a successful bidder it will be the largest strata-titled conserved development to be see a successful en bloc sale.

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According to Chris International’s Director Chris Koh, the conservation status is likely to discourage many of the owners to vote for a collective sale as the same status brings in the certainty of lease renewal once the current lease period exhaust.

Conserved properties get their lease automatically renewed. He also added the new status might create that urge among owners to ask for a higher price if the threshold of consent is met for an En bloc sale.

However, this might prove to be counterproductive as developers are likely to think twice before committing into it given the restricted flexibility in redevelopment owing to the property’s conserved status.

He isn’t too sure whether this move will increase the prospects of an En bloc sale but the conserved status is definitely welcome given the iconic status of the building.

Nicholas Mak, ERA Realty’s Head of Research that finding space to build a 30-storey building on this site would be a huge challenge despite the waiver announced by the URA.

He questioned the logic behind finding space for additional floor area at the site while conserving the iconic façade this building is famous for.

Tan Hong Boon, Executive Director for Capital Markets at JLL was more optimistic about a collective sale after the new announcement.

But he sounded a word of caution that a collective sale would only be possible when the expected return for the developer is greater as compared to the cost of acquisition and redevelopment.

According to him conserved properties often have the additional pull factor to attract buyers.

Institute of Real Estate and Urban Studies’ Deputy Director Lee Nai Jia said that given the conserved status and the latest incentives announced in terms of waiving the development charges this iconic property has enough of equity to attract developers.

Mr. Lee added that developers who have significant reserves and eying a development in this location might see incentives in picking this up despite the gloom prevailing in the market.

Urban Redevelopment Authority shall welcome public feedback on the proposal for Golden Mile Complex’s conservation till November 8.

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Find Out More in Next Coming Months…

Golden Mile Complex En Bloc Site Details

Tenure: 99-yr Leasehold

Land Size: 139,931 square feet

Total Units: 718

Nearest MRT: Nicoll Highway

Address: 5001 Beach Road

District: 7

Marketing Agent: None Appointed Yet

Previous En Bloc Price: S$800 Million

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