Tender for former has indicative price of around $48m; $28-29m for latter
(SINGAPORE) A freehold residential project at Balestier and 14 freehold strata shop units at Holland Village are up for sale.
The tender for Melrose Court, at 10 Lorong Limau off Kim Keat Road, has opened, with an indicative price of around $48 million for the four-storey 32-unit development.
Melrose Court is on a site with a gross plot ratio of 2.8. Colliers International, which is handling the collective sale, said that it can be redeveloped into a 22-storey project of 88 apartments, each measuring 830 sq ft. The development charge will be around $2.38 million.
The new project would have a total gross floor area of 73,271 sq ft, including an additional 10 per cent of space allowed for balconies. The total land price would work out to around $688 per sq ft per plot ratio.
More than 80 per cent of Melrose Court's owners have agreed to the collective sale. Based on the asking price of $48 million, each of them stands to receive $1.23-2.46 million if the deal goes through.
Colliers believes that the site will attract mid-size developers as the development cost is relatively small. Collective sales involving projects on the fringe of the city have a high chance of success because of a more 'manageable gap' between asking and offer prices, said the agency's investment sales executive director Ho Eng Joo.
Also, the collective sale market is slowly recovering, he said. Projects sold en bloc recently include Meng Garden Apartments, People's Mansion and the Colourscan building.
Colliers is also managing the tender for 14 freehold strata units on the second floor of Holland Road Shopping Centre. The indicative price for the adjoining shops is $28-29 million, which works out to $5,051-5,231 psf based on the total gross floor area of 5,543 sq ft.
The owner, an investment company, is selling the shops in line with a portfolio reorganisation. A home decor retailer currently leases all 14 units at a monthly rent of between $10 and $11 psf, under a tenancy agreement that expires in 2013.
The large tenant was able to secure rent slightly below the market rate. According to Colliers' agency and business services deputy managing director Grace Ng, rents in the shopping centre are higher for smaller units and can range from $20-40 psf.
It is rare for a large retail space in a popular spot to be up for sale, Ms Ng said. In 2008, a unit on the second floor of the mall was sold for $4,955 psf.
According to her, properties in Holland Road Shopping Centre 'are likely to experience capital and rental appreciation' with Holland Village MRT station scheduled to open next door in 2011.
Source: Business Times, 15 Jul 2010