Renewed interest in ageing mixed-use developments on Orchard Road
By Tan Chee Yuen
/ EdgeProp |
Ask Buddy
The collective-sale fever has returned, and some investors are adopting a long-term position by buying units in ageing, freehold buildings in the prime Orchard Road belt. One building that has become a target of late is Orchard Towers. Completed in 1975, the mixed-use development has become a landmark on Orchard Road. Orchard Towers, which is freehold, comprises two buildings separated by Claymore Drive. Fronting Orchard Road is the 25-storey commercial building with five floors of retail and F&B, with offices on the upper floors. The 25-storey rear block contains five floors of retail/F&B and 58 apartments on the upper floors. The apartments are all identical in size — 1,970 sq ft, three-bedroom units.
At Orchard Towers, it is not just the apartments that are strata-titled, but the retail and office units as well as the carpark. The latest transaction of a retail unit at Orchard Towers was for a 334 sq ft unit on the third floor that changed hands for $1.05 million ($3,147 psf) in July, according to a caveat lodged then. The most recent office unit that changed hands was a 958 sq ft one that fetched $1.75 million ($1,827 psf).
The recent spate of collective sales — eight so far, with a total transaction value of about $3.5 billion — may have sparked the hopes of strata unit owners in buildings such as Orchard Towers. “They have periodically contemplated a collective sale,” says a property consultant who declined to be named. “However, the challenge of mounting a collective sale in a mixed-use development is that there are many owners with different interests."
This is further complicated by the share allotment, with a higher number of shares going to retail unit owners, followed by office unit owners and, lastly, residential unit owners. Some of the established retail/F&B businesses at Orchard Towers are doing well, and the owners may be less motivated to pursue a collective sale, according to the property consultant.
Lucky Plaza is another ageing mixed-use development that has been on the radar of investors. Sitting on Orchard Road, Lucky Plaza is flanked by Marriott Hotel and Tang Plaza on one side, and Tong Building on the other. The 30-storey, freehold commercial- cum-residential development was developed by Far East Organization and completed in 1981.
Developed by Far East Organization, Lucky Plaza was completed in 1981
The shopping centre has 500 retail shops, medical centres and F&B outlets spread across six floors and the basement. The ninth to 30th floors contain a total of 88 apartments; while the multi-storey carpark is situated on the fourth to eighth floors.
At Lucky Plaza, the latest transaction of an apartment was that of an 829 sq ft, two-bedroom unit on the 13th floor that was sold for $1.55 million ($1,870 psf), according to a caveat lodged on Aug 8. In July, a 1,647 sq ft, four-bedroom apartment fetched $2.38 million ($1,442 psf).
For the strata shop units, the latest transactions were in May, when three units changed hands. One was a 248 sq ft unit on the second level that went for $1.5 million ($6,059 psf). A 194 sq ft unit in the basement level fetched $1.8 million ($9,290 psf), and a 269 sq ft unit on the third floor was sold for $1.45 million ($5,388 psf), according to caveats lodged.
At Lucky Plaza, the highest psf price achieved for a shop was in 2012, when two adjacent units on the first floor with a combined strata area of 1,001 sq ft was sold for $14 million ($13,985 psf). This is because the first floor fronts the street and has high pedestrian traffic.
Meanwhile, the highest psf price achieved for an apartment at Lucky Plaza was for a 1,647 sq ft, four-bedroom unit on the 23rd floor that was sold for $3.88 million ($2,356 psf) in March 2011, according to a caveat lodged then.
“The allure of collective sale potential is the most likely reason people are buying into these ageing developments on Orchard Road, particularly Lucky Plaza and Orchard Towers,” says Samuel Eyo, managing director of Singapore Christie’s International Real Estate. “In the meantime, units in these developments also enjoy good rental yields.”
This article appeared in The Edge Property Pullout, Issue 794 (Aug 28, 2017) of The Edge Singapore
Ask Buddy
Follow Us
Follow our channels to receive property news updates 24/7 round the clock.
EdgeProp Telegram
EdgeProp FacebookSubscribe to our newsletter
Top Articles
Search Articles