Delfi Orchard En Bloc Sale 2024 – Prime Freehold D9 (CCR)
Delfi Orchard Hits the Market with a $438 Million Guide Price for Collective Sale
In a significant move in the real estate market, Delfi Orchard, a prominent mixed-use building located at the heart of Singapore’s prestigious Orchard Road, has been listed for a collective sale with an ambitious guide price of $438 million.
Savills Singapore is managing this sale, which presents a significant opportunity for redevelopment in one of the city’s most sought-after districts.
Delfi Orchard, primarily owned by the renowned City Developments Ltd. (CDL), encompasses a freehold site of 20,264 square feet, currently zoned for commercial use.
With a permissible height of up to 20 storeys, the existing 11-storey complex includes 150 strata-titled units, comprising 127 retail shops and 23 residential apartments.
Notably, 126 of these units are under CDL’s ownership.
According to Savills, owners of the 23 residential units at Delfi Orchard should receive between S$2.2 million and S$4.6 million each after a successful sale.
Meanwhile, the commercial units’ owners could earn between S$984,000 and S$24 million per unit.
City Developments Ltd. (CDL), holding the majority of the building’s strata titles, is poised to receive the largest portion of the proceeds from the sale.
Orchard Road Development Opportunity: Delfi Orchard’s Strategic Sale Highlights Potential for Diverse Redevelopment
Delfi Orchard is strategically positioned on Orchard Road, making it a prime candidate for developers aiming to capitalize on its high-profile location.
According to Savills, the guide price translates to approximately $3,397 per square foot per plot ratio (psf ppr), inclusive of a $7.6 million land betterment charge.
This valuation is based on the potential to redevelop up to 131,186 square feet, aligning with the site’s approved development baseline.
This collective sale initiative follows the successful transactions of other notable properties in the area, such as the Ming Arcade and Tanglin Shopping Centre, highlighting the ongoing attractiveness of Orchard Road for commercial and mixed-use developments.
The previous deals in the vicinity underscore the robust demand and high valuation benchmarks set within this premium shopping district.
The potential for redevelopment extends beyond simple commercial use.
Subject to approval from the Urban Redevelopment Authority (URA), the new development could include hotel and/or residential components, offering a versatile development opportunity.
Additionally, the buyer may explore benefits under the government’s Strategic Development Incentive (SDI) scheme, which encourages extensive, integrated redevelopments with adjacent properties.
Delfi Orchard’s sale is not just a transaction but a landmark opportunity to reshape a significant portion of Singapore’s most famous shopping street.
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Is Delfi Orchard Poised to Break Orchard Road’s Collective Sale Records?
Orchard Road, Singapore’s premier shopping street, continues to be a hotbed for real estate transactions, drawing significant attention with every collective sale announcement.
Notably, recent sales such as Ming Arcade, Tanglin Shopping Centre, and Park House have set high benchmarks in the commercial real estate market, while the aborted sale of Far East Shopping Centre underscores the challenges and uncertainties that can affect such high-stake deals.
Top Record Collective Sales Around Orchard Road District
Record-Breaking Sales Set High Expectations
Ming Arcade, a notable transaction in the area, sold for S$172 million in December 2022, establishing a record-high land rate of S$3,125 per square foot per plot ratio (psf ppr).
This sale highlighted the ongoing demand and premium valuations within this upscale shopping district.
Similarly, Tanglin Shopping Centre was purchased for S$868 million by the Tanoto family’s Pacific Eagle Real Estate, translating to S$2,769 psf ppr.
Furthermore, the notable Park House fetched a staggering S$2,910 psf ppr, amounting to S$375.5 million, setting a national record at the time for a collective sale per square foot per plot ratio.
These transactions collectively underscore the high-value stakes associated with Orchard Road properties, driven by their strategic locations and redevelopment potential.
Each sale not only reflects the robust appetite for premium real estate but also sets a precedent for subsequent sales in the area.
Challenges in Collective Sales: The Case of Far East Shopping Centre
Contrasting these successes, the Far East Shopping Centre presented a case where high expectations met regulatory hurdles.
Initially aimed to be another record sale, the deal was set around S$910 million, or S$3,421 psf ppr.
However, the sale was ultimately aborted when the buyer, Glory Property Development, backed by Chinese billionaire Du Shuanghua, could not secure approval for an increased gross floor area under the government’s Strategic Development Incentive (SDI) scheme.
The rejection by the Urban Redevelopment Authority (URA) not only halted what could have been a record-setting transaction but also highlighted the complexities and risks inherent in relying on regulatory approvals for redevelopment plans.
Delfi Orchard: A New Beacon on Orchard Road?
As Delfi Orchard enters the market with a guide price of S$438 million, translating to about S$3,397 psf ppr, it beckons the question of whether it can surpass the high benchmarks set by its predecessors or face challenges similar to those at Far East Shopping Centre.
The property’s strategic location and potential for comprehensive redevelopment, including possible residential or hotel use, position it as a prime candidate for setting a new record in collective sales on Orchard Road.
Moreover, prospective buyers might be encouraged by the government’s SDI scheme to propose ambitious redevelopment plans that could maximize the site’s value, similar to what was attempted with Far East Shopping Centre.
However, the outcome will heavily depend on navigating the regulatory landscape effectively and aligning with URA’s stringent requirements.
A Market Keenly Watching
With the public tender set to close on May 27, the real estate community and potential investors are keenly observing Delfi Orchard’s sale process.
This commercial property’s outcome could either reinforce Orchard Road’s status as a top-tier location for record-breaking real estate deals or serve as a cautionary tale of the challenges facing collective sales in premium locales.
Regardless, Delfi Orchard’s current collective sale attempt is a landmark event, marking another chapter in the dynamic story of Orchard Road’s development history.