Far East Shopping Centre En Bloc Sale Could Set a New Record if Sold
The Far East Shopping Centre, located in Orchard Road Singapore’s bustling shopping district, has been put up for collective sale with an impressive guide price of S$928 million, according to real estate services and investment firm CBRE.
This could be a record-breaking transaction if it is successfully sold, given the size of the property and its premium location.
Under the Urban Redevelopment Authority’s (URA) Strategic Development Incentive (SDI) scheme, developers can transform this older building into an exciting, vibrant destination.
If the prime site meets URA’s redevelopment conditions, the property could enjoy a 20% increase in gross floor area (GFA), boosting the property’s development potential and its value.
CBRE’s head of Singapore capital markets, Michael Tay, pointed out that the Far East Shopping Centre is currently the only commercial en bloc site available for sale along Orchard Road, reinforcing its appeal.
He went on to say that the site is “strategically positioned” to be a part of the government’s plan, with the SDI concept intended to “speed up the revitalization of Orchard Road.”
“We believe this opportunity will appeal to both local and foreign developers because the incoming buyer will have the freedom to create an iconic mixed-use development on Singapore’s most prominent street.”
Mr. Tay added that the SDI scheme “proposes direct underground pedestrian links from the existing Orchard MRT Station and Thomson-East Coast Line Orchard MRT Station to the new integrated development.”
“This will significantly increase foot traffic on Orchard Road.” Under the scheme, the developer of the new integrated development may also explore a mix of other land uses such as retail, hotel, office, MICE facilities, and lifestyle uses.”
The new buyer is also compelled under the SDI program to participate in a shared, integrated renovation with its neighbouring properties.
The S$928 million reserve price is based on the SDI scheme’s maximum buildable GFA of 290,574 sq ft. The land price works out to S$3,421 per sq ft per plot ratio, inclusive of the Land Betterment Charge, assuming full commercial use.
Given that the site is zoned for commercial use, the successful bidder will not have to pay any additional buyer’s stamp duty (ABSD), further sweetening the deal.
So Far in the Orchard Road District, Ming Arcade Which Sold En Bloc in 2022 at a Land rate of S$3,125 psf ppr is the Highest Sale.
Far East Shopping Centre Will Enter Singapore Record Book If Sold.
Orchard Road District – Record Breaking Collective Sales
In February last year, the Tanglin Shopping Centre site was sold en bloc to Pacific Eagle Real Estate for S$868 million at a land rate of S$2,769 psf ppr.
This marked the second collective site sold en bloc in 2022, attracting significant attention due to the central location of the property and the competitive bidding process that ensued.
Another prime site that made breaking news was the Ming Arcade, a prime commercial property in Orchard Road, that has been sold en bloc to Royal Group for S$172 million, marking a new record in Singapore’s collective sales history.
The sale price translates to a land rate of S$3,125 psf ppr, shattering the previous record of S$2,910 psf ppr set by Park House on Orchard Boulevard four years ago.
Royal Group outbid other competitors and paid 34% more than the reserve price, originally set at S$140 million in November 2022. This sale resulted in a significant payday for Ming Arcade owners, who could receive between S$750,000 and S$30 million each.
The Royal Group, a Singapore-based family office led by property tycoon Asok Kumar Hiranandani, has the flexibility to either carry out asset improvement project works or redevelop the land into a new complex featuring a luxury hotel, retail, office, and residential spaces.
Orchard Road Singapore Rejuvenation Plan:
Singapore’s Orchard Road, a world-renowned shopping destination, is undergoing changes to remain competitive and relevant in light of emerging retail trends and changing consumer behaviour.
The future of retail in Orchard Road is seen as ‘experiential,’ with a focus on curated experiences, both in stores and the surrounding environment, including enhanced open spaces, smaller event areas, and an embrace of the area’s unique greenery.
Infrastructure improvements are also crucial, such as increased crosswalks, improved wayfinding, and pedestrian-friendly measures to enhance movement within and between the shopping precincts, aiming to create a shopping district that is interconnected and easy to navigate, much like Bangkok’s Sukhumvit Road.
Far East Shopping Centre Situated in One of The Best Business locations in Singapore
The Far East Shopping Centre is located at 545 Orchard Road in prime district 9, within the Core Central Region (CCR) of Singapore.
Situated at the strategic junction of Orchard Road and Angullia Park, the site spans 36,014 square feet.
Its 999-year lease, effective from 1871, coupled with the commercial zoning, makes this property an alluring prospect for any developer.
The dual road frontage of approximately 130 meters adds to the site’s charm, allowing for high visibility and easy access.
The existing building comprises a two-storey basement, mainly serving as a car park, a five-storey retail podium, and a 10-storey office block.
However, the opportunity that lies within this structure is what truly excites potential buyers.
The Far East Shopping Centre’s prospective sale presents a promising opportunity to reshape the Orchard Road landscape, providing a unique chance to blend retail, office, hotel, MICE facilities, and lifestyle uses under one roof.
Its proximity to Orchard Road MRT station and neighbouring structures such as the Voco Orchard hotel and Liat Towers shopping mall enhance its attractiveness to developers, while also serving as a bellwether for the health of the Singaporean commercial property market.
If this sale goes through, it could indeed set a new record and open the door for more significant transactions within the property sector.
Such a sale may inspire confidence among commercial property owners that the market remains robust, further encouraging investment in commercial properties.
Stay tuned for the public tender that is set to close on September 20th; the results could herald a new era in Singapore’s commercial real estate scene.