Two office buildings in city get into en bloc mode

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Shenton House and Golden Wall Centre have kick-started the process; neither has set an asking price yet

TWO centrally-located commercial buildings are preparing to join the fray as they kick-start their collective sale processes.

Shenton House, located in the older Robinson-Shenton-Cecil section of the central business district (CBD), has formed its collective sales committee (CSC) and hopes to appoint its marketing agent by the end of this week.

On the fringe of the city, at the junction of Short Street and Rochor Canal Road, Golden Wall Centre, a freehold commercial property, held an extraordinary general meeting on Tuesday and successfully set up its CSC.

It being so early in the process, neither development has set a reserve or asking price.

That said, if history can serve as a guide, Shenton House had an indicative price tag of S$530 million, or about S$1,720 per square foot per plot ratio (psf ppr) in its last attempt at an en bloc sale in 2012.

This was after factoring in an estimated differential premium of S$73 million to use a higher plot ratio, and another S$132 million to top up the lease of the site to 99 years.

Another bid at a collective sale in 2008 had failed to garner the requisite 80-per-cent consensus, making this year's attempt its third.

The 174-unit development has retail shops on the first three floors and office units from the seventh through 25th storey. Car park lots take up the the floors in between.

Built in 1969, Shenton House has about 51 years left on its lease. Its area of 3,377 sq m can be built up to a maximum gross plot ratio of 11.7, or a gross floor area (GFA) of 425,292 sq ft; its GFA is now 301,661 sq ft.

Cushman & Wakefield's executive director of capital markets Shaun Poh, who was involved in the 2012 en bloc exercise, said that, going by his interaction with the authorities at the time, he believes the government is keen to rejuvenate this particular development.

"If we look at the whole Shenton Way, most of the developments have gone into redevelopment, retrofitting or repositioning, except probably Shenton House.

"There are not many assets in the older CBD area for sale or redevelopment, the latest one being the redevelopment of Afro-Asia Building along Robinson Road (announced in July 2017)."

Aside from a combination of retail and office units, Shenton House could possibly also have a residential component, subject to planning approvals, he said.

This proposition would be attractive, not just to capitalise on the recent upturn in the private home market, but also as a way for the developer to self-finance the project construction by pre-selling the residential units and then recycling the capital for the project.

For Golden Wall Centre, it will be a second en bloc attempt; its first in March last year failed to find a taker.

The 36-year-old office-cum-retail development sits on a 2,252 sq m land area zoned for commercial use.

The building's plot ratio is 4.882; its total gross floor area stands at about 11,008 sq m. The 158-unit development currently also houses a restaurant.

In its 2016 tender launch, the owners were reportedly asking for bids in the range of S$250 million to S$270 million, or S$2,110 to S$2,280 psf ppr based on the existing gross floor area of the building.

Mr Poh said that the property may be redeveloped to include a themed boutique mall comprising IT trades or enrichment centres and commercial schools - possibly even a serviced-residence component, subject to approval.

The Verge, a development in the nearby Little India, obtained approval to include such a use in its redevelopment.

Source: Business Times, 1 Nov 2017