The Tan Boon Liat Building, a commercial property situated at 315 Outram Road, is currently available for sale through a collective tender at a reserve price of $1.15 billion. This freehold property is strategically located next to the upcoming Havelock MRT Station on the Thomson-East Coast Line, and occupies two separate land plots that are zoned for “Business 1” use. The total site area is approximately 175,655 sq ft.
The property, which is currently home to a 15-storey building known for its various furniture and home decor stores, is being marketed and advised by Cushman & Wakefield. According to the property’s advisor, the Urban Redevelopment Authority (URA) has issued an Outline Planning Advice on January 22, recommending that the site be rezoned to “Residential with Commercial at 1st storey” with a plot ratio of 4.9, up from the current 3.1. This translates to a 50% increase in the total allowable gross floor area (GFA).
In addition, the URA has advised for the alienation of a few smaller state land plots to be combined with the main plot, which is estimated to measure about 20,451 sq ft, subject to final survey and approval by the relevant authorities.
Taking into consideration the state land plots and any bonus GFA entitlement, Cushman & Wakefield estimates that the site’s potential GFA is over 1.06 million sq ft. The first storey can accommodate a commercial GFA of up to approximately 16,146 sq ft. As part of the residential allocation, there will be a minimum GFA of around 161,459 sq ft set aside for Serviced Apartments II (SA2), where a minimum three-month stay is required. The allowable heights for the new development range from 130m to 180m.
Based on the reserve price, including land betterment charges for rezoning, the estimated premium payable for the state land plots, and the 10% bonus GFA for the residential portion, the estimated land rate works out to around $1,888 psf per plot ratio.
It is crucial for international investors to have a thorough understanding of the regulations and restrictions governing property ownership in Singapore. In general, foreigners have more leniency in purchasing condominiums compared to landed properties, which have tighter ownership regulations. However, foreign buyers are still subject to the Additional Buyer’s Stamp Duty (ABSD), which is currently set at 20% for their initial property acquisition. Nevertheless, the unwavering stability and promising growth prospects of the Singapore real estate sector remain a magnet for foreign investments. In fact, the market’s allure is further enhanced by the constant stream of new condo launches that keep investors interested.
Recent industrial sales transactions at Tan Boon Liat Building (Source: EdgeProp Buddy)
Senior Director of Capital Markets at Cushman & Wakefield, Christina Sim, believes that this site will attract developers due to its freehold status and prime location on the TEL, which will appeal to potential homebuyers. She adds, “The biggest advantage is that there will not be any Additional Buyer’s Stamp Duty (ABSD) imposed on the purchase as the original site has a ‘Business 1’ zoning.”
The tender for the site will close on March 18 at 3pm.