SINGAPORE - Wharf Estates Singapore has put the freehold retail podium at Scotts Square on the market with a $450 million guide price.
The guide price for the mall, on a prime spot off Orchard Road, translates to a rate of $3,438 per sq ft per plot ratio (psf ppr), based on a gross floor area of 130,875 sq ft.
Located at 6 Scotts Road, Scotts Square sits on a 5,215.5 sq m plot of land between the Grand Hyatt Singapore hotel and Tangs.
The mixed development is owned by Wharf Estates Singapore, formerly known as Wheelock Properties.
In June 2004, Wheelock bought what was Scotts Shopping Centre and the 23-storey The Ascott Singapore Serviced Residences above it for $345 million. It tore down the building, which housed Singapore’s first food court, Picnic, to redevelop it into Scotts Square.
Wharf Estates also owns Wheelock Place, a 99-year leasehold mixed retail-office building at the corner of Scotts Road and Orchard Road.
Scotts Square comprises two luxury residential towers and a retail mall which spans four storeys.
According to EdgeProp, the total net lettable area of Scotts Square’s mall is 76,657 sq ft, which is now 98.8 per cent occupied with existing rents averaging less than $10 psf.
Current tenants include popular brunch spots Wild Honey and Eggslut, while golf retailers have moved into the third floor.
Hong Kong luxury shoe retailer On Pedder moved out in 2021, closing its largest free-standing store in Asia. Lifestyle retailer Planet Plus has taken up Pedder’s second-floor space, moving into the mall in 2023.
A recent report on the Singapore retail sector from consultancy CBRE said retail rents are steadily recovering, “following the more than 10 per cent fall to its trough in 2021”.
“While prime rents have yet to return to the pre-pandemic levels of almost $28.00 psf per month, recovery is expected to continue beyond 2023,” CBRE said in its November 2023 report.
According to Cushman & Wakefield, Orchard Road rents for prime retail mall units with good frontage and accessibility are around $34.80 psf per month.
“The prime Orchard Road precinct includes a small number of properties where ownerships are tightly held by Reits, large developers, and a few private owners. The opportunity to buy a freehold flagship retail property is very rare, and we expect strong interest from buyers,” said Mr Jeremy Lake, managing director of investment sales and capital markets at Savills Singapore, which is the exclusive marketing agent for Scotts Square.
He added: “Scotts Square enjoys an approximately 50m frontage along Scotts Road and is highly visible. The buyer can reposition Scotts Square and curate a boutique flagship property attracting luxury designer, watch and jewellery brands with a Michelin-starred restaurant occupying the third floor.
“There is significant potential to increase the net lettable area and the rents in Scotts Square and thereby increase the net operating income.”
The expression of interest exercise for Scotts Square will close on Feb 6.
Interest in Singapore’s prime retail belt is stirring, with several properties sold in recent years. Orchard Road is also set to see new developments aimed at a rejuvenation of the shopping street.
The marketing of Scotts Square comes about three months after a deal was struck to sell Far East Shopping Centre for about $910 million, subject to conditions, to a company linked to Chinese businessman Du Shuanghua.
This translated to $3,421 psf per plot ratio, based on the initial guide price of $928 million and a maximum buildable gross floor area of 290,574 sq ft under the Government’s Strategic Development Incentive scheme, assuming full commercial usage and including a land betterment charge.
In 2022, Tanglin Shopping Centre was sold for $868 million or $2,769 psf ppr to Pacific Eagle Real Estate, a Singapore-based real estate investor and developer privately held by the Tanoto family.
According to market sources, commercial complex Delfi Orchard is looking for a collective sale opportunity which may open the doors for redevelopment in the future.
The Urban Redevelopment Authority has also greenlit a proposal from tycoon Ong Beng Seng’s Hotel Properties Limited (HPL) to turn its Forum The Shopping Mall, voco Orchard Singapore and HPL House into a huge mixed-use redevelopment with a hotel and luxury residences as well as retail and office components. THE BUSINESS TIMES
