Horizon Towers relaunched at $1.1b in 3rd collective sale bid

Horizon Towers (left), which has 56 years left on its lease, and Sultan Plaza, a 45-year-old commercial building. PHOTOS: LIANHE ZAOBAO, TEAKHWA REAL ESTATE

SINGAPORE – The heat is on for some ageing luxury leasehold condos in the Orchard Road area that are trying their luck at a collective sale.

Horizon Towers in Leonie Hill relaunched a collective sale tender for a third time at the same $1.1 billion reserve price as before, even as prime District 10 condo Orchard Bel Air’s $587.5 million tender closed on Tuesday with no bids.

The Straits Times understands that owners of Horizon Towers’ 200 apartments stand to get between $4.7 million and $5.2 million each, while owners of the 11 penthouses could each reap between $9.2 million and $10 million.

Horizon Towers, which has 56 years left on its lease, is described by its marketing agent JLL as “by far the most reasonably priced private residential site in and around the Orchard Road neighbourhood this collective sale cycle”.

The reserve price translates to a land rate of about $2,049 per sq ft per plot ratio (psf ppr) after factoring in the lease top-up premium, estimated at $277 million.

“As there is no development charge payable for intensification of the site even with the 10 per cent bonus gross floor area due to a high development baseline, the reflected unit land rate is $1,862 psf ppr,” said Mr Tan Hong Boon, executive director of capital markets at JLL.

In comparison, Orchard Bel Air’s $587.5 million guide price translates to a land rate of about $2,600 psf ppr after factoring in an upgrading premium of $131 million for the lease top-up.

No development charge is payable. Taking into consideration the 7 per cent bonus gross floor area allowed for balconies, this translates into $2,526 psf ppr.

Orchard Bel Air, which has 57 years left on its lease, comprises 71 units.


Orchard Bel Air’s $587.5 million tender closed on Tuesday with no bids. PHOTO: KNIGHT FRANK

ST understands that owners of the 99-year leasehold condo have entered into talks with potential buyers.

Horizon Towers made its first collective sale attempt just before the July 6, 2018, cooling measures were announced, and again in 2019. Both tenders closed without buyers. The current tender closes on Oct 20 at 3pm.

Within walking distance of Great World and Orchard MRT stations, the 1.9ha site is zoned “residential” in the 2019 Master Plan, with an allowable height of up to 36 storeys and may be redeveloped into a luxury high-rise project.

“With decreasing unsold stock of new residential units in the prime district, especially around Orchard Road, we expect the site to attract developers that can build a new project comprising 560 units at an average size of 1,200 sq ft,” Mr Tan said.

Meanwhile, Sultan Plaza, a 45-year-old commercial building, is relaunching at a lower reserve price of $325 million on Friday, after a previous tender at $360 million closed on June 28 with no buyers. Its first attempt to sell en bloc in 2019 was at $380 million.

But there is no closing date for the current tender until a requisite 80 per cent mandate has been secured for the lower price, or when there is a confirmed buyer, according to its marketing agent.

The 52,471 sq ft commercial-zoned site comprises 211 commercial units and 33 offices, totalling 244 strata lots.

Owners holding about 80 per cent by strata area and 72 per cent by share value have signed an agreement to cut the reserve price to $325 million, Mr Sieow Teak Hwa, managing director of marketing agent Teakhwa Real Estate, told ST.

At $325 million, owners of the shops stand to get between $147,000 and $41.8 million, while the offices owners will get $560,000 to $1.85 million, Mr Sieow added.

The proposed reserve price will translate into a land rate of $1,545.80 psf ppr, including estimated costs to buy the state land, the differential premium and the lease top-up premium. It will average down to $1,504.30 psf ppr after factoring in an 8 per cent bonus gross floor area.

In-principle approval has been given by the Singapore Land Authority for a potential sale of remnant state land of about 10,968 sq ft adjoining the site.

The plot can be expanded to about 63,439.8 sq ft and redeveloped to a gross floor area of 317,198.9 sq ft.

Apart from commercial use, the site can be redeveloped for mixed use, with 20 per cent floor area for commercial use and 80 per cent for residential.

This translates to a potential new 38-storey project with 277 apartment units at an average size of 915 sq ft, subject to the authorities’ approval, Mr Sieow added.

It can also be redeveloped into a 700-room hotel with shopping and commercial space.

There is no additional buyer’s stamp duty payable for the commercial site.

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