The 17-storey Sim Lim Tower sits on a freehold plot of 40,698.35 sq ft, and is zoned for commercial use (Photo: Samuel Isaac Chua/EdgeProp Singapore)
SINGAPORE (EDGEPROP) - The owners of Sim Lim Tower formed a collective sale committee (CSC) in June. They are now shopping for a marketing consultant to advise them on the process, as this is their first collective sale attempt. (See also: High Street Centre launches second collective sale tender)
The 17-storey Sim Lim Tower at 10 Jalan Besar was developed by Sim Lim Realty, a wholly owned subsidiary of Sim Lim Group of Companies, and opened in 1980. The mall has been positioned as an “electronic and electrical city”, focusing on products from cables to electronic components such as resistors and capacitors.
The four levels of retail shops span the basement to the third level. The fourth to sixth floors contain parking spaces and some office units. The top 10 floors — from the seventh to 17th floors — are occupied by offices.
Many of the owners and tenants at Sim Lim Tower have been there for many years, says Bafna Rajesh Jograj, the CSC chairman. “I’ve been here for 20 years,” says Rajesh, who runs a consulting services firm. Others in the committee have been owners of units from five to 30 years. “There are many long- term business occupiers, investors and ten- ants at Sim Lim Tower,” he adds.
The occupancy levels for the office units have been generally “quite high”, notes Rajesh. “At any one time, you will probably see just one or two units for lease on the notice board.” The retail shop units, on the other hand, have seen some vacancy emerge, especially units in the secondary corridors. “It’s not just due to the Covid-19 pandemic,” he adds. “In recent years, the popularity of on- line shopping and e-commerce has affected the retail sector.”
Standing at the balcony of the penthouse level of Sim Lim Tower are the collective sale committee members (from left): Gopalan Govindarajan (secretary), Bafna Rajesh Jograj (chairman), Kong Ngio Meng (vice chairman), Lui Ah Chong (joint secretary) and Tan Seng Hee (CSC member) [Photo: Samuel Isaac Chua/EdgeProp Singapore]
There are 265 strata-titled units at Sim Lim Tower. Retail units make up 60% or 160 of the strata-titled units. Offices, which include whole strata floors on the 14th and 15th floors, account for 92 units or 34.7% of the strata-titled units.
Sim Lim Tower sits on a freehold site of 40,698.35 sq ft. Therein lies the attraction of the site, according to the CSC members. The last few collective sale attempts of commercial buildings have mostly been of leasehold properties, such as High Street Centre, Sim Lim Square, Shenton House and Textile Centre, they point out.
Sim Lim Square, located directly opposite on Rochor Road, had made a second collective sale attempt in late December 2019, with a reserve price of $1.25 billion, but failed to find a buyer. The commercial development was built in 1987, but has a 99-year lease from 1983, which means it has a remaining lease of 61 years.
As Sim Lim Tower is freehold, the new buyer would not need to pay for a lease top- up, points out Rajesh.
The shops at Sim Lim Tower sell mainly electrical and electronic products (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Adjacent to Sim Lim Tower is the former Rochor Centre. The mixed-use complex with its multi-colour blocks of flats and retail shops has already been torn down to make way for the construction of the North-South Corridor.
The former Sungei Road flea market site is zoned for future residential development under the government land sales programme. “Including the former Sungei Road flea market site, there are four plots around this area that are zoned for residential or mixed-use development,” says Jac Teo, a Sim Lim Tower CSC member. “As the area is being rejuvenated, it will present interesting opportunities for developers.”
What’s more, the conservation shophouses in Little India have been in demand, as investors have been snapping them up and retrofitting them. They want to bring in better tenants, and that has led to both an increase in rental and in capital values, observes Teo.
Near Little India, the former Golden Wall Center on Short Street was sold en bloc to World- wide Hotels, the parent company of Hotel 81, for $276.2 million in November 2018. It will be redeveloped into a new hotel. Meanwhile, Fragrance Group acquired Min Yuan Apartments on Waterloo Street in 2019, and amalgamated it with a neighbouring plot it already owns to redevelop the site into a new hotel. (See: See potential condos with en bloc calculator)
About 160 out of the 265 strata-titled units at Sim Lim Tower are shop units, and they are situated across four floors from the basement to level three (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Sim Lim Tower’s CSC committee members believe that their property presents great redevelopment potential for a new buyer too. As the site is zoned for commercial use, the new buyer will not be subjected to addition- al buyer’s stamp duty or the qualifying certificate regime, says Rajesh. The view from the 17th-floor penthouse level is unblocked as there are no high-rise towers in the immediate vicinity, he adds. “This presents an opportunity for the new developer to build a landmark project on the site.” (See: Find Singapore commercial properties with our commercial directory)
According to Shaun Poh, head of capital markets at Cushman & Wakefield, prime, freehold commercial sites are rarely available. “They are sought-after by foreign developers looking at preserving the value of a property over the long term, hence the preference for freehold tenure.”
The two closest MRT stations are the Jalan Besar and Rochor MRT Stations on the Down- town Line, but the site is also near two MRT interchange stations: the Bugis interchange for the Downtown and East-West Lines and Little India, the interchange for the North- East and Downtown Lines.
The plot is also connected to all the major highways, says Rajesh, from the Eeast Coast Park Expressway (ECP) to the Kallang-Paya Lebar Expressway (KPE) and the Central Expressway (CTE) and Pan-Island Expressway (PIE). “All major highways are within a few minutes’ drive,” he adds. “One cannot find such plots easily as most of the commercial developments which have, or are attempting an en bloc are leasehold and are not so well connected.”
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