Far East Shopping Centre back on market at unchanged S$928 million asking price

This follows Glory Property Developments pulling out of an earlier deal to acquire building

Apr 19, 2024

FAR East Shopping Centre has been put back on the market, in a fresh tender pitched at the same guide price of S$928 million.

This comes after Glory Property Developments, a company linked to Chinese businessman Du Shuanghua’s Bright Ruby Resources, pulled out of a deal announced in September 2023 to acquire the building.

If it had not fallen through, the deal, said to be struck at around S$910 million, would have been the largest collective sale of 2023.

On Friday (Apr 19), an advertisement placed in The Business Times indicated that CBRE was putting up for sale by public tender 545 Orchard Road, the address of Far East Shopping Centre.

The guide price for the 999-year leasehold property is unchanged from its earlier en bloc attempt, a CBRE spokesman confirmed with BT.

The S$928 million guide price would amount to a land rate of S$3,421 per square foot per plot ratio, according to CBRE. This takes into account a land betterment charge to rebuild up to the maximum buildable gross floor area (GFA) of 290,574 sq ft under the Strategic Development Incentive (SDI) scheme, or 20 per cent more than the site’s current development baseline of 242,145 sq ft, assuming full commercial usage.

The buyer would need to apply to the Urban Redevelopment Authority (URA) for approval for its proposed redevelopment, to take advantage of the GFA extension. The SDI scheme, designed to encourage the renewal of ageing buildings in city areas, offers developers more GFA for a project on condition that they engage in a joint integrated redevelopment with adjacent sites.

The prime District 9 site is “suitable as an integrated mixed-use redevelopment comprising retail, lifestyle, hotel and office” uses, subject to URA approval, the advertisement said.

Last week, BT reported that the earlier deal had come undone after Glory Property Developments failed to secure URA approval for its proposal under the SDI scheme.

Glory Property had submitted an application to URA on Dec 29, 2023, with a plan to build a “new commercial and hotel development”.

In a statement dated Jan 24, URA said: “The proposal cannot be supported as it constitutes only a single development site and thus does not fulfil the eligibility criteria for the SDI scheme.”

A letter dated Apr 8, 2024, was circulated to owners, informing them that Glory Property had decided to terminate the sale contract. The letter also noted that four objectors had earlier filed an application to the Strata Titles Board (STB) to stop the sale. The letter said that on Apr 4, “while three out of four objections were withdrawn, as not all of the objections filed were withdrawn by the deadline stipulated, the STB issued a Stop Order”.

Built in 1974, Far East Shopping Centre houses a five-storey retail podium, a 10-storey office block and a two-storey basement. Around 30 per cent of the property’s share value is still owned by Far East Organization, which had developed it. In its vicinity are Bonvests Holdings’ Liat Towers and Wharf Estates Singapore’s Wheelock Place.

Far East Shopping Centre stands next to a stretch of buildings owned by Ong Beng Seng’s Hotel Properties Ltd, which were bundled together in a redevelopment proposal approved by the URA earlier. These include the voco Orchard Singapore hotel, Forum The Shopping Mall and HPL House.

The tender for Far East Shopping Centre closes at 3pm on May 2.

https://www.businesstimes.com.sg/pro...n-asking-price