Freehold United House Orchard Road Launches Collective Sale 166 Mil
A prime opportunity has arisen for developers or investors as United House, a freehold commercial building at 20 Kramat Lane has been launched for collective sale at $166 million. This is the first successful collective sale launch of the building, which has made three previous attempts without garnering the necessary 80% owners’ consent in both strata area and share value.
Managed by real estate agency Edmund Tie, the 12,838 sq ft site has a plot ratio of 4.9 and is zoned for commercial use under the Master Plan. According to the agency, the site has the potential to be redeveloped into a 10-storey commercial building with a gross floor area (GFA) of up to 62,900 sq ft. The reserve price of $166 million translates to $3,025 psf per plot ratio (ppr) if the site is redeveloped into a new commercial project.
Swee Shou Fern, the head of investment advisory at Edmund Tie, shared that the site falls outside of the areas where new strata subdivision of commercial space is restricted. This provides the successful buyer with the flexibility to consider strata subdivision for the new development, which can potentially boost the value of the project.
Edmund Tie has also submitted a planning application to the Urban Redevelopment Authority (URA) to change the land zoning for hotel use, with a plot ratio of 4.9. If approved, the site can be redeveloped into a new hotel project, which would increase the land rate to $3,318 psf ppr. Swee believes that the prime location along the Orchard Road shopping belt makes it an ideal site for a new hotel project. The ongoing enhancements to Orchard Road, coupled with United House’s redevelopment potential, are highly likely to result in significant capital appreciation in time to come.
The Concorde Hotel & Shopping Centre at 100 Orchard Road, which is adjacent to United House, is also attempting a collective sale. Hospitality giant Hotel Properties owns the 99,623 sq ft plot and has priced the site at $820 million. This price tag includes bonus GFA from balconies and a lease top-up premium of $213.1 million, bringing the land rate to $1,801 psf ppr.
Other buildings along Orchard Road have been undergoing redevelopment or asset enhancement initiatives, with some in close proximity to United House. The Cathay and Faber House, for instance, are being redeveloped into a 250-key hotel.
With its prime location along the Orchard Road shopping belt, United House is just a short walking distance from Somerset MRT Station along the North-South Line and Dhoby Ghaut Interchange, which serves the North East, North-South and Circle Lines.
The collective sale tender for United House closes on Nov 14, providing developers or investors with a prime opportunity to tap on its redevelopment potential and capital appreciation in the long run.
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