Saturday, March 30, 2013

Analysts say $450m compensation for Pearls Centre acquisition fair  |  Posted: 29 March 2013 1845 hrs

SINGAPORE: The government's S$450 million compensation package for the acquisition of Pearls Centre is fair, say analysts Channel NewsAsia spoke to.

However, some tenants who did not receive an ex gratia or goodwill payment are appealing to the authorities.

Compensation for properties at the multi-storey Pearls Centre varies.

According to Pearls Centre management, for commercial units facing the road, the compensation is S$9,000 per square foot.

Shops that are near the escalator get S$3,000 per square foot.

Other areas get at least S$1,200 per square foot.

As for residential properties, the figure is S$1,100 per square foot.

Analysts say the compensation is reasonable.

Christine Li, head of research and consultancy at OrangeTee, said: "As the government has not been topping up commercial leases for quite some time, developers are not really prepared to pay today's market value, even if this site was put up for collective sale. So, we think that the (compensation) price is largely in line with fair value."

However, some tenants like Mr Ravishankar did not receive the ex gratia payment, which can be as high S$30,000.

He has been running an Internet cafe on the ground floor of the centre for about
six years.

He said he contacted the Singapore Land Authority.

Mr Ravishankar said: "There is no reason given. So I just simply called them, then asked them what is the reason. They said they cannot tell me, it's a case-by-case problem. They asked me to appeal through the email."

Pearls Centre management says that out of its 250 tenants, about 30 per cent were affected.

Kok Chee Choon, committee member of Pearls Centre management, said: "We've received more than 10 calls from those who did not receive the ex gratia payment. After we've gathered their feedback, we'll be appealing to the authorities next week to try and get some compensation for these tenants."

For the ex gratia payment, the Singapore Land Authority says it considers tenants' age, the duration of their operations, the scale and nature of their business, and whether they are Singapore citizens.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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