Results 1 to 2 of 2

Thread: Some commercial buildings finding it hard to sell en bloc

  1. #1
    Join Date
    Oct 2011
    Posts
    10,829

    Default Some commercial buildings finding it hard to sell en bloc

    Some commercial buildings finding it hard to sell en bloc

    Buyers deterred by high retail vacancy rates and prohibitive selling prices


    PUBLISHED MAY 8, 2019

    Derek Wong


    Some commercial buildings are facing an uphill task trying to achieve collective sales, with buyers deterred by high retail vacancy rates and prohibitive selling prices.

    One of the more recent candidates for such a sale is Queensway Shopping Centre, a 45-year-old freehold site known for its sporting goods, but it has been far from smooth sailing.

    An April 20 meeting to obtain consent for the move found that many owners were opposed to selling.

    One is tailor Simon Chong, who is unimpressed by the $480,000 being offered for his 106 sq ft store.

    He said in Mandarin: "It's a freehold space and we have our regular customers. Why would I want to sell it?"

    The Straits Times understands that shop owners, who collectively account for more than 20 per cent of the property's share value, have joined forces to oppose the deal.

    Rising numbers of commercial and mixed-use developments have hopped on the bandwagon since 2017, including landmarks such as People's Park Centre, Golden Mile Complex and Sim Lim Square.

    However, such projects usually see a lower success rate than their residential counterparts.

    The high vacancy rates for strata-titled commercial property are a major deterrent to developers, said Mr Terence Lian, head of investment sales for Huttons Asia.

    The islandwide retail vacancy rate hit 8.7 per cent as of March 31, up from 8.5 per cent as of Dec 31.

    "If you are able to convert (the development) to hotel use - looking at the pipeline, (there is) quite a rosy outlook in the near future," he added.

    "But, of course, the location and the price have to be considered."

    Mr Lian also noted the relatively high reserve prices of recent tenders for collective sales.

    Real estate academic Sing Tien Foo said the upcoming supply of commercial space in prime retail belts such as Orchard Road and the Marina area adds to the competition, increasing risks for developers already facing high development costs.

    He added that the cooling measures announced in July last year still have to be considered for commercial buildings if they are redeveloped into mixed-use projects.

    "The residential components will still be subject to ABSD (additional buyer's stamp duty) rules and the developers will have to be careful in assessing the market risks," he said.

    There is a growing number of commercial buildings with closed collective sale tenders that remain unsold, including Jalan Besar Plaza and Verdun House. Golden Mile Complex closed its second tender last month without news of a buyer.

    Some developments have raised their prices to get owners on board so they can achieve the 80 per cent mandate to sell.

    Sim Lim Square increased its asking price from $1.1 billion to $1.3 billion, while People's Park Centre lifted its reserve from $1.3 billion to $1.35 billion.

    Nonetheless, there has still been the occasional sale. The Realty Centre office building in Tanjong Pagar was sold last month for $148 million - some way short of the $165 million reserve price.

    In March, the freehold Selegie Centre in prime District 7 went for its reserve price of $120 million on its third attempt. Golden Wall Centre in Rochor, also freehold, was sold for $276.2 million, 6 per cent above the $260 million reserve price, in November last year.

    Despite the challenges, Ms Suzie Mok, senior director of investment at marketing agent Savills Singapore, which is handling the Queensway sale, hopes to get a public tender out within the next six months.

    She added that there is potential to build a freehold residential project on the site, which is "rare in the vicinity".

    A version of this article appeared in the print edition of The Straits Times on May 08, 2019, with the headline 'Some commercial buildings finding it hard to sell en bloc'.

  2. #2
    Join Date
    May 2019
    Posts
    28

    Default Re: Some commercial buildings finding it hard to sell en bloc

    So many commercial buildings already, the old ones especially needs to go soon, singapore is developing too fast. too much supply and rent here is so expensive!

Similar Threads

  1. Commercial, residential buildings to find new life as hotels
    By reporter2 in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 09-12-19, 11:47
  2. Two commercial buildings in prime areas up for tender
    By reporter2 in forum HDB, EC, commercial and industrial property discussion
    Replies: 1
    -: 10-09-15, 19:21
  3. commercial buildings in D5
    By proud owner in forum District 5
    Replies: 3
    -: 12-07-13, 16:48
  4. Commercial buildings also stand to gain
    By reporter2 in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 07-09-12, 18:22
  5. Place older buildings' heritage along with commercial value
    By mr funny in forum HDB, EC, commercial and industrial property discussion
    Replies: 0
    -: 05-05-07, 04:09

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •