Business Times: Fri, Aug 31
[SINGAPORE] Consultants peg the market value of the strata-titled Pearls Centre in Chinatown between $450 million and $600 million. One consultant suggested that the government compensation may fall within this range, or 5 to 10 per cent either side of the valuation.
According to Dennis Chiu, managing director of the Tang Group of Companies, talk of launching the property onto the collective sale market was floated about three months ago, and a sales committee was formed recently.
Discussions were at a preliminary stage, and the committee was supposed to select a valuer yesterday, said Mr Chiu, whose family controls the Far East Consortium International Limited group in Hong Kong.
Tang Group, which is developing Dorsett Regency Hotel and Dorsett Residence near Chinatown, owns about 47 per cent of Pearls Centre, which spans some 47,000 sqm (about 505,903.3 sq ft).
Of this, about 17 per cent is office space, 43 per cent is shopping space, and 10 per cent is residential. The remaining 30 per cent is carpark space, said Mr Chiu.
Said Donald Han, special adviser at HSR: "This project is fairly unique because it just appointed a collective sales committee so the grounds for wanting to be paid based on potential collective sales pricing could be valid. But then again, if you're looking strictly at the provisions of the Land Acquisition Act, compensation will be made based on market value. So that will depend on how the government treats the property, and how it evaluates the current value of the site."
According to a Singapore Land Authority spokesperson, compensation will be pegged to the market value of the property, taking into account past transactions, the condition of the property, and other reasonable expenses including legal fees, relocation costs, and stamp duties.
According to Mr Han, collective sales that do transpire tend to fetch a 20-30 per cent premium over current market value. That being said, this property has a leasehold tenure, so any premium depends on whether the government will allow the current stakeholders to refresh their lease.
According to David Ng, executive director, valuation, at DWG, retail units at Pearls Centre are transacting in the range of $1,100-$2,500 psf depending on the size and floor on which the unit is located. Residential apartments range from about $850-$1,050 psf.
"Residential units on higher floors may fetch between $950 psf and $1,050 psf while those on lower floors may fetch between $850 psf to $950 psf." he said.
Added a market watcher who did not want to be named: "This is a strata-titled building with individual owners; some may own a couple of units or a whole floor. These guys will be the ones to watch for, whether they try to negotiate for better prices. If they fight for a higher price, smaller individuals may come into the picture."
Opened in 1969, the 23-storey Pearls Centre currently houses 44 residential units and 199 commercial units. Occupants have 24 months to vacate, while the rest have 18 months to do so. The MP for Tanjong Pagar GRC, Indranee Rajah, will meet tenants of Pearls Centre tomorrow to understand better their concerns about having to move out within the next two years.
Following the acquisition of Pearls Centre, the site will be integrated with the adjoining state land for a high-density mixed-use development to optimise land use around the future Thomson Line station at Outram Park.
According to a spokesperson from the Urban Redevelopment Authority, the gross plot ratio for both sites is 5.6. The total area after amalgamating the land is around 2.8 ha (0.53ha from Pearls Centre and 2.29ha from the vacant state land).
Said DWG's Mr Ng: "The (Pearls Centre) site is currently zoned commercial, which is one of the highest valued use in the property market. However, if it is rezoned as a white site, it could be as successful as the Clarke Quay site that was won in 2000 and developed in a retail and SOHO development with an MRT station below... If fully commercial, it would mirror the Robinson Road/Cecil Street site sold in September 2011 at $9,494 psm per plot ratio (approximately $311million)."
Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)
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