City Towers’ asking price doubles in 3 mths

CITY Towers on Bukit Timah Road is for sale by tender with an indicative price of $458.7 million, almost double the price indicated just three months ago.

An expression-of-interest exercise was held in April by marketing agents Knight Frank. Senior manager (investment sales) Steven Tan said it drew about five bids.

At the time, only 75 per cent of the owners had agreed to proceed with a collective sale.

‘The owners believe the new indicative price is reflective of market prices,’ said Mr Tan. The minimum 80 per cent approval from owners to sell has now been obtained.

The development is on 104,535 sq ft of freehold land, which is zoned for residential use at a plot ratio of 2.1, with a height restriction of 24 storeys.

Mr Tan says the successful developer can build an estimated 183 units of average 1,200 sq ft each.

Together with an estimated development charge of about $2.2 million, the indicative price reflects a land value of $2,100 per square foot per plot ratio.

As the current development is close to the maximum gross floor area, the development charge is only slightly more than the estimated $1.7 million it would have been three months ago before the rates were revised.

The break-even price is estimated at $2,870 psf, and Mr Tan expects the new units to sell for at least $3,000 psf.

On East Coast Road, Savills Singapore is marketing 48 strata-titled commercial units at EastGate, a 52-unit freehold development, for sale en bloc by expression of interest.

‘All 48 units are currently near full occupancy and are generating good cash flows from its rental collections,’ said Steven Ming, director (investment sales) of Savills Singapore. The freehold property has an indicative price of $80.3 million or $1,350 psf, based on current net lettable area.

‘Investors and buyers have begun to look at opportunities beyond the traditional CBD locations for good commercial buildings that could still present good upside potential in terms of both rental rates and capital value appreciation,’ said Mr Ming.

Potential average rentals are expected to be $5 psf.

Source: The Business Times, 25 July 2007