Katong Plaza and Roxy Square are almost joined at the hip (Image: Google)
Fragrance Group has acquired Singapore’s Katong Plaza for S$180 million ($139 million), market sources confirmed to Mingtiandi, with the owners of the retail-residential asset notching a collective sale win on their fourth attempt amid a quiet season for en bloc deals.
The price translates to S$1,809 ($1,397) per square foot of accommodation for the property, which the Urban Redevelopment Authority has granted planning permission for redevelopment into a 340-room hotel. Fragrance, the local hotel developer led by James Koh, takes control of the freehold site at 1 Brooke Road, a five-minute walk from Marine Parade MRT station on the eastern fringe of central Singapore.
Terence Lian of Huttons Asia represented the sellers but wouldn’t reveal the identity of the buyer. The deal follows closely on the failed collective sale of next-door Roxy Square, whose tender at a S$1.25 billion guide price concluded last week with no bids.
Owners of Katong Plaza’s 132 retail units stand to get proceeds ranging from S$502,000 to over S$6 million while 14 residential owners will be getting between S$2 million and S$5.1 million, according to Lian, who heads investment sales at Huttons.
“This successful collective sale offers owners a significant premium over previous transaction prices,” Lian told Mingtiandi. “We believe this sale will boost confidence in the collective sale market as developers continue to pursue attractive land parcels.”
Fourth Time Lucky
First reported by the Business Times on Wednesday, the sale of Katong Plaza represents a 4 percent discount to the S$188 million guide price upheld by the ownership since Huttons first marketed the 1983-era building in June 2018.
Fragrance Group chairman and CEO James Koh
After the ill-fated first attempt at an en bloc sale, the property obtained tentative URA clearance for a hotel conversion and made two separate tries in 2019. The latest collective sale was launched in May of this year.
The adjacent Roxy Square, meanwhile, comprises 296 shops, 26 apartments and 576 hotel rooms. The development was built in three phases from the early 1980s to 2000 by formerly SGX-listed Roxy-Pacific Holdings, which is headquartered at the property and went private in 2022.
The minimum price of S$1.25 billion works out to S$2,094 per square foot of built area, inclusive of a land betterment charge at the gross plot ratio of 3.86, according to JLL.
Subject to regulatory approval, a new owner of Roxy Square could redevelop the existing 668,000 square foot (62,059 square metre) complex into a 10 percent larger project, the consultancy said.
Middling Market
The contrasting outcomes at Katong Plaza and Roxy Square point to a mixed picture for Singapore’s collective sale market in recent months.
In June, an attempted collective sale of Far East Shopping Centre failed for the second time in three months, with owners rejecting an offer of roughly S$880 million ($654.5 million) for the strata-titled property on Orchard Road.
Mingtiandi reported in May that an Indonesian developer new to the Singapore market was offering S$850 million for the property near the intersection with Paterson Road, citing sources familiar with the deal. The offer came on the heels of Du Shuanghua’s Bright Ruby Resources withdrawing its S$908 million bid after failing to win approval to expand the floor area permitted for a new project on the 999-year leasehold site.
Also in May, City Developments Ltd was awarded the rights to Delfi Orchard, a strata-titled 11-storey commercial building near the intersection with Claymore Road, after bidding S$439 million ($325.6 million) in a collective sale. CDL already held 126 of the 150 strata units in the 1985-vintage building.
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