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JLL confirms en bloc sale of Thong Sia to Sin Capital

Business Times - July 30, 2015

JLL confirms en bloc sale of Thong Sia to Sin Capital



BROKER JLL on Wednesday confirmed that a member of Sin Capital Group, a private investment group in Asia, has signed a deal to buy Thong Sia Building, a 26-storey building located along Bideford Road opposite The Paragon.

This is the first collective sale this year and the largest ever mixed use collective sale in Singapore, JLL said. As The Business Times has reported, the purchase price of S$380 million translates to S$2,430 per square foot (psf) over the existing gross floor area for the freehold building.

The price makes it the second largest collective sale over the last seven years after Serangoon Plaza, a fully commercial development, was sold for S$400 million in 2013. When contacted, Sin Capital Group could not shed more light on the redevelopment plans for the building at the moment, except to say that it does not intend for any change of use. Keeping the existing structure, as opposed to tearing it down, could also be an option.

The planning authority has said it is prepared to support the redevelopment of the site into a mixed residential and commercial development with at least 60 per cent of the space set aside for residential or serviced apartments. Serviced apartments fall under residential, from a zoning perspective. Sin Capital is a private investment group that makes mostly prime commercial real estate investments in and outside of Singapore.

Thong Sia Building, built in 1981, has a land area of about 21,602 square feet, and currently comprises seven levels of commercial space and a 19-level residential tower of 37 apartments. It has a gross floor area of 156,300 square feet, reflecting a gross plot ratio of about 7.23.

“While en bloc sales tend to take place when the market is on the uptrend, which is not the case now in particular for the residential market, there would still be takers for attractive and well-priced assets such as Thong Sia Building,” said Karamjit Singh, international director, JLL, who represented the owners.

The sale is subject to, among other things, approval by the Strata Titles Board, before completion of the sale will occur. The latest tender exercise ended on May 20. The deal was closed during the subsequent 10week private treaty period. Prior to this, there was another tender exercise in January, which yielded some bids that were below the S$400 million price tag the owners were looking for.

Before the sale, the commercial space was owned by the Buxani-Capital Management Group partnership, while the residential apartments were owned by individual owners. Although the S$380 million price did not meet the minimum S$400 million reserve price that Thong Sia Building’s majority owners had stipulated, some in the market say that it is already a very high price in this moribund market.


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