The aggressive bidding is expected to push property prices in Singapore's Orchard Road.
Shun Tak Holdings bought two Singapore properties located at prime sites for a total of $3.49b (S$593.5m) in deal brokered by CBRE, an announcement revealed.
The two overseas purchase include the acquisition of the $2.21b (S$375.5m) Park House in 21 Orchard Boulevard and another one in Nassim Road believed to be the former residence of advisory firm Siang Kuang’s Tan family.
“Our group has been diligently exploring investment opportunities beyond our Greater China home base, and Singapore is certainly one of our strategic emphases given its robust growth,” Shun Tak group executive chairman and managing director Pansy Ho.
The company is positive that the residential properties will bring the group a fresh addition to their existing hotel and commercial portfolio in Singapore.
Bold bids placed by Shun Tak may test new highs for selling prices in the vicinity of Orchard Road, according to DBS analyst Derek Tan. After assuming a 10% balcony bonus, break-even levels for Park House and 14 & 14A Nassim Road clock in at $3,300 psf and $3,100 psf respectively, according to DBS estimates, suggesting that projects in the pipeline could hit or even breach the $4,000 psf mark.
“We note with over 20 sites sold within the core central region year to date, supply in the CCR for new developments is building up in the near term and competition for buyers’ attention is also heating up,” the analyst explained.
The Orchard Boulevard property is a 60-unit development with 56 apartments and four shop units. Each apartment owner will be compensated with a gross payout of $35.8 m (S$6.1m), whilst each shop owner will be given $47.58m ($8.1 million). The freehold property is said to be viable for redevelopment into a luxury residential development with a gross floor area of 129,035 sqft (11,987.74 sqm) without payable development charge.
Meanwhile, Shun Tak's second acquisition is a property located on a freehold site. It is near the Siang Kuang Avenue believed to be named after the family formerly owned of the property.
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