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CDL buys Delfi Orchard en bloc for $439 mil

/ EdgeProp Singapore |

May 28, 2024 6:21 PM SGT

CDL which already owns 84% of the strata commercial and residential units in Delfi Orchard emerges the winner of the collective sale tender at $439 mil (Photo: Savills Singapore)

Singapore-listed City Developments Ltd (CDL) has won the collective sale tender for Delfi Orchard at $439 million. The 11-storey, freehold strata-titled commercial building was launched for tender on April 18 at a guide price of $438 million, with Savills Singapore as the exclusive marketing agent.

The tender for the collective sale closed on May 27 and is said to have drawn a handful of bids. The highest bid of $439 million was from CDL's wholly-owned subsidiary, CDL Draco Pte Ltd. The sale price of $439 million works out to about $3,346 psf per plot ratio (ppr) based on the existing gross floor area (GFA) of 131,186 sq ft.

CDL already owns 84% or 126 of the 150 strata commercial and residential units at Delfi Orchard. The acquisition of the remaining units will allow the company to "potentially unlock the full potential of this prime freehold asset", said Sherman Kwek, CDL's group CEO. "With several redevelopments anchoring the planned transformation for this part of the Orchard Road precinct, this is an exciting opportunity for us to participate in the rejuvenation efforts."

Delfi Orchard is located at 402 Orchard Road, next to the 656-key Orchard Hotel Singapore and Claymore Connect mall. The hotel was sold to CDL Hospitality Trust in 2006 on a 20-year lease from July 2006, with an option to extend for another 75 years. However, CDL has retained a freehold reversionary interest in Orchard Hotel and Claymore Connect. CDL also owns Palais Renaissance, which is located across Claymore Road.

According to CDL, there is potential to tap on the Urban Redevelopment Authority's Strategic Development Incentive Scheme, which the company may explore in the near future.

Delfi Orchard is the third major collective sale in the Orchard Road corridor following the earlier successful collective sales of Tanglin Shopping Centre for $868 million ($2,769 psf ppr) in February 2022 and Ming Arcade for $172 million ($3,125 psf ppr) in September 2023. Savills brokered all three deals.

CDL had significantly benefited from the collective sale of Tanglin Shopping Centre as it owned 85 strata lots, including two carparks in the building before the sale. The sale was part of its strategy to divest some of its legacy assets. Tanglin Shopping Centre was previously owned by King's Tanglin Shopping, whose parent company is Millennium & Copthorne, which is, in turn, a subsidiary of CDL.

According to Jeremy Lake, Savills Singapore's managing director of investment sales & capital markets, the sale of Delfi Orchard shows that "developers continue to be drawn to prime development opportunities here and are very excited by the URA's plans to rejuvenate and refresh Orchard Road". Rajah & Tann acted for the vendors in the collective sale.

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