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Vendor expecting offers in the region of $60 million
SINGAPORE, 24 JUNE 2015 – JLL has been appointed by a private vendor as the exclusive marketing agent for a 22,800 sq ft redevelopment site located in Katong.
The freehold site, located at Nos. 12/A/B/C/D Amber Road, is zoned 'Residential' under the 2008 Master Plan, and has an allowable Gross Plot Ratio (GPR) of 2.8.
"Steeped in its unique and rich cultural history that dates back to the late 19th century, the Katong area has always been a traditional favourite for the seafront lifestyle that it offers. At the same time, residents enjoy easy access to amenities at Marine Parade and Parkway Parade, whilst having the airport and the Central Business District just a short drive away," said Ms Yong Choon Fah, National Director, Capital Markets, JLL.
"The subject site is located approximately 150 metres from the future Amber MRT station, which is expected to be operational in 2023. There are currently several vacant old houses located on site. As these houses all belong to a single vendor, Strata Titles Board approval is not required for the purchase. The successful purchaser can hence take possession of the site upon legal completion, and plan towards marketing or building the project relatively quickly if needed," added Ms Yong.
"In today's climate, with the implementation of the Additional Buyer's Stamp Duty (ABSD) and curbs on the Total Debt Servicing Ratio (TDSR), coupled with Qualifying Certificate (QC) requirements imposed on foreign developers, bigger projects are often perceived to be riskier given the longer time needed to complete the designing, marketing and construction".
"Much of the land that was made available in the market largely comprised of Government Land Sale sites, which tend to be large-sized plots located in suburban areas. The sheer size of these plots meant they mainly catered to bigger developers, thereby forcing smaller developers to either join forces to acquire a site, or to sit by the sidelines until a more affordable opportunity materialises," said Ms Yong.
"In this instance, a developer could look towards building a total gross floor area (GFA) of about 63,820 sq ft on the site, and may be able to accommodate up to 80 high-rise apartments. Depending on the proposed design of the building, some of the residential units could potentially enjoy partial sea-views."
She explained: "A redevelopment project of this scale could appeal to the smaller or mid-sized developers, given that the total land investment quantum, including development charges, would be below $100 million. Given the relatively low quantum involved, a Singaporean developer or purchaser could choose to acquire this freehold site to add to their land-bank for future development if they have no immediate plans to build."
According to the vendor's manager, the vendors decided to initiate this divestment exercise in light of the news of the recent tender launch of Amber Park. Given that this site is only a fraction of the size of Amber Park, the vendors feel that it could potentially appeal to a wider target market. The manager said that the vendors are motivated to sell, and are expecting offers in the region of $60 million for the property, which translates to a land rate of approximately $941 psf ppr before factoring development charges.
Ms Yong added: "For a redevelopment up to GPR 2.8, the development charges are estimated to be in the region of $18.47 million. A land price of $60 million would hence work out to a land rate in the region of $1,230 psf ppr."
Interested purchasers are invited to submit their offers by 2.30 pm on 28 July 2015.
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Yong Choon Fah
+65 6494 3671 / +65 9026 9021