January 31, 2019
International Plaza in Tanjong Pagar, one of Singapore's biggest integrated developments built in the 1970s, is looking to launch a collective sale in excess of $2.6 billion - potentially the biggest in the country.
The 50-storey leasehold commercial-cum-residential building, with a gross floor area of 1.44 million sq ft, has 51 years left on the lease, collective sales committee (CSC) chairman Kevin Liang told The Straits Times yesterday.
It was originally developed by the Cheong family, who are related to the Cheongs who control Singapore-listed Hong Fok Corp, he said.
"This is the first time we are trying (to sell) en bloc. Some of the owners want to cash out. Another motivation is rising maintenance costs. We had a spalling concrete problem that cost about $2.9 million to fix. The repairs are still ongoing until December this year. Rather than deal with more maintenance issues that could crop up as the building is nearly 50 years old, we decided to try (to sell) en bloc," Mr Liang said.
Sitting on a land area of 75,089 sq ft, the 1,160-unit development was completed in 1976 and is zoned commercial. It has 263 shops on the first three floors, 689 offices from the 5th to 36th floors, and 208 apartments, including two penthouses, from the 37th to 50th floors. The building currently houses CNBC and the Honorary Consulate of Malta.
"International Plaza had a unique design concept that was ahead of its time in the 1970s. Few developments back then had a 36th-floor swimming pool and squash court. But the new project can include a hotel, office and apartment block, and it can be a new landmark integrated development in Tanjong Pagar," Mr Liang said.
The 13-member CSC was elected at the first extraordinary general meeting (EOGM) on Oct 20, with a second EOGM planned next April to confirm the appointment of a marketing agent and lawyer, as well as the reserve price and terms and conditions of the collective sale deal.
"Then we start to collect the (required) 80 per cent of signatures," he said. Mr Liang is also a member of the CSCs for High Street Centre, a 99-year leasehold property along North Bridge Road, and Leonie Gardens in District 9.
Owners of the 689 offices at International Plaza can expect to get between $1.2 million and $5.5 million, he said.
Mr Liang, who is chief executive of IT recruitment agency EPS Consultants, said his companies collectively own eight units at the development. He added: "As this is a mixed-use development, we may favour a method of apportionment that weighs more towards valuation."
Mr Karamjit Singh, chief executive of new homes portal Showsuite and senior consultant at JLL, believes that a potential challenge is "coming to a fair and equitable method of apportionment as there are apartments, shops and offices".
"As long as the pricing is realistic in relation to redevelopment potential, there will be developers who may be keen. Tanjong Pagar as a commercial hub is growing with Guoco Tower, Frasers Towers and ASB Tower, the new office de-velopment coming up at the former CPF building," he said.
International Property Advisor chief executive Ku Swee Yong sees the collective sale site as a "potential prime office area that may be completed after IOI Properties' Central Boulevard project in the Marina Bay area".
Asset management firms like BlackRock may be interested, said Mr Ku.
"Developers like CapitaLand, which need to feed good quality assets into their Reits (real estate investment trusts), may also be interested," he added.