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.