AFTER receiving unsolicited interest from potential buyers for 15 Hoe Chiang Road, Fragrance Group has appointed JLL to conduct an expression of interest (EOI) exercise for the freehold property.
The guide price of S$715 million could translate to anywhere from S$2,138 per square foot per plot ratio (psf ppr) to S$2,877 psf ppr, depending on the redevelopment scheme a potential developer pursues.
The 39,337 sq ft site, with triple frontage along Hoe Chiang, Cantonment and Lim Teck Kim roads, has been approved for hotel use with a gross floor area (GFA) of about 248,483 sq ft – or an equivalent gross plot ratio of 6.3168 – based on a written permission issued last November.
Going by this proposal, the S$715 million guide price works out to S$2,877 psf ppr. No development charge (DC) is payable.
Earlier this year, Fragrance obtained provisional permission for a project of up to 37 storeys with additional 25 per cent GFA, effectively increasing the GFA to 310,604 sq ft (or equivalent to 7.896 plot ratio), under the Central Business District (CBD) Incentive Scheme.
This proposal, also under hotel zoning, will mainly comprise hotel rooms but also include a serviced apartment component and ancillary commercial space. Based on this proposal, the S$715 million pricing reflects S$2,529 psf ppr, inclusive of an estimated S$70.6 million DC payable to the state.
Developers will have two other options under the CBD Incentive Scheme, which was unveiled by the Urban Redevelopment Authority (URA) last year to encourage owners of older, predominantly office buildings in some parts of the CBD to redevelop their properties into mixed-use projects. The aim is to inject a bigger live-in population and liven up the district in the evenings and on weekends.
If 15 Hoe Chiang Road is redeveloped into a commercial and residential project, it would also qualify for 25 per cent additional GFA. Assuming the developer also taps the 7 per cent bonus GFA for balconies for the residential component, the guide price translates to S$2,214 psf ppr, inclusive of S$1.45 million DC.
Another option would be to develop a residential project with commercial space at the first storey. This would qualify for 30 per cent additional GFA. Again, assuming the developer taps the 7 per cent bonus GFA for balconies for the housing component, the guide price would translate to S$2,138 psf ppr (inclusive of nearly S$19 million in DC).
The EOI exercise will close on Sept 11, 2020.
“The property’s current non-residential zoning means that there is no additional buyer’s stamp duty payable and no foreign ownership restrictions,” JLL said.
The property consulting group’s executive director of capital markets, Tan Hong Boon, said: “Given its highly coveted freehold tenure, prominent corner location and allowable height, No 15 Hoe Chiang Road presents developers and investors with a rare opportunity to own a flagship building with excellent visibility and naming rights for their commercial or hospitality uses; or to develop a mixed-use project with Grade A offices cum luxury residential units exploiting the prized scenic views that are sought after by well-heeled international residential investors who are prepared to pay good premiums for their sky abodes on the highest floors in the city.”
He added: “In the locality of Anson, Hoe Chiang, Tanjong Pagar and Cantonment roads, we are observing potential rapid changes with several redevelopment plans underway, all taking advantage of the CBD Incentive Scheme and set to turn the locale into a new focal point extending towards and integrating into the proposed Greater Southern Waterfront.”
Fragrance Group, which is controlled by James Koh Wee Meng, paid S$360 million in 2012 for 15 Hoe Chiang Road – a 29-storey development known as Tower 15 and incorporating Klapsons The Boutique Hotel on the lower floors.
The group is understood to have received enquiries from potential local and overseas buyers via agents in the past three months or so for this asset.
It decided on conducting an EOI exercise before making a decision on whether to sell the property. Otherwise, its plans are ongoing to redevelop the property into a hospitality asset.
Initial demolition works have begun.