Following the close of its collective sale tender on Dec 19, 2017, Pearlbank Apartments in Outram was sold through a private treaty collective sale to CapitaLand Limited for $728 million, announced the developer on Feb 13. The sale price, with an additional lease top-up premium for a fresh 99 years estimated at $201.4 million, translates to a land price of $1,515 psf ppr. There is no development charge payable, says Colliers International, which brokered the deal.
The 82,376 sq ft Pearlbank Apartments site atop Pearl’s Hill in Outram Park has a Gross Plot Ratio of 7.2 under the 2014 Master Plan. However, it has an existing Gross Plot Ratio of 7.4479. As such, the site has the potential to be redeveloped into a residential development with a total GFA of approximately 613,530 sq ft, says Colliers.
Subject to conditions precedent, CapitaLand plans to redevelop the Pearlbank Apartments site into a highrise residential development with about 800 units. Every unit will enjoy unblocked panoramic views extending from the Central Business District (CBD) to Sentosa as the site is on elevated ground, says CapitaLand. The project is targeted for completion by early 2023, right after the opening of the third MRT line in Outram, the Thomson-East Coast line, says Ronald Tay, CEO of CapitaLand Singapore.
Every unit of the new project will enjoy unblocked panoramic views extending from the CBD to Sentosa as the site is on elevated ground, says CapitaLand (Credit: Colliers International)
“This site is a rare gem with its prime location at the confluence of Singapore’s business and cultural districts as well as its excellent transport connectivity,” says Lim Ming Yan, president and group CEO of CapitaLand Limited. “The acquisition is in line with CapitaLand’s disciplined investment strategy to build our quality residential pipeline on a sustainable basis.”
The 37-storey Pearlbank Apartments comprises a total of 288 units (280 apartments and eight commercial units). According to Colliers, the apartment owners, whose unit sizes range from approximately 1,323 sq ft to 3,993 sq ft, stand to receive between $1.8 million and $4.9 million from the successful sale of the property. Meanwhile, owners of commercial units with sizes ranging from approximately 700 sq ft to 5,630 sq ft, will potentially receive between $1.2 million and $6.9 million. The Pearlbank Apartments site is subjected to the Pre-Application Feasibility Study (PAFS) which was announced by the Urban Redevelopment Authority on November 13, 2017.
“The introduction of the PAFS - just weeks before the close of the public tender - was a setback for the collective sale as interested parties needed more time to assess its impact,” says Alex Poh, chairman of Pearlbank Apartments collective sale committee. “Despite the challenges, we are pleased that Colliers, with its extensive network of investors and real estate expertise, managed to secure a deal through private treaty.”
While residents of Pearlbank Apartments had previously explored the idea of conserving Pearlbank Apartments, recent sentiment has strongly shifted to redevelopment, says Poh. A deeper analysis of the building structure and the required enhancement work show that conservation would be a costly undertaking and a huge burden for the owners, explains Poh, who adds that “it is not a viable nor favourable option for the residents.”
“I believe that the future development will be well-received by investors as well as home buyers who aspire to live in an exciting and historic locale in the city,” says Tang Wei Leng, managing director at Colliers International. “Future apartments in the development could be sold at an average price of $2,600 psf or around $2.5 million, which is relatively affordable for such a choice location.”
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