ERA Daily Research - 28 April

CDL-MCL Land tie-up makes top bid of $445.9m for Farrer Park residential site

The Straits Times, 28 Apr 2021, Wed

By Grace Leong

The first residential government land sales (GLS) tender for 2021 - a plum site in the Farrer Park area - closed on Tuesday (April 27) evening after attracting 10 bids and a robust bid price that showed developers' hunger for land.

The 99-year leasehold parcel in Northumberland Road, near Little India - offered for sale by the Urban Redevelopment Authority under the GLS programme for the second half of 2020 - is the second GLS tender to close since the Covid-19 pandemic began.

City Developments (CDL) and joint venture partner MCL Land, through their wholly-owned units Maximus Residential SG and Maximus Commercial SG, emerged the top bidder at $445.9 million. This is only 5.7 per cent higher than the second highest bid of $421.9 million.


The top bid of $1,129 per sq ft per plot ratio (ppr) is at the upper end of analysts' estimates. It is also higher than that of another GLS site in Perumal Road, where Uptown @ Farrer is being developed, which was awarded at $1,001 psf ppr in 2017.

CDL group chief executive Sherman Kwek said: "We are elated to be the top bidder and honoured to have our first collaboration with MCL Land."

He added that the acquisition ensures that CDL maintains a healthy inventory level in Singapore.

MCL Land chief executive Tan Wee Hsien said: "We have full confidence in the long-term fundamentals of the Singapore residential market."

A decision on the award of the tender will be made after the bids have been evaluated.

The site can be developed into a mixed-use project comprising 408 residential apartments of up to 23 storeys and commercial retail space - including an infant care and childcare centre - on the ground floor.

Bounded by Gloucester and Race Course roads, the site is near the Farrer Park MRT station, City Square Mall, Mustafa Centre and Connexion, an integrated medical centre and hotel development.

Analysts say the new project may be launched at between $1,900 and $2,100 psf.

Diminishing private housing supply in the city-fringe area and strong take-up in new launches could have sparked robust competition for the Northumberland Road site, said ERA Realty head of research and consultancy Nicholas Mak.

He added that this tender could set the tone for two other residential GLS tenders closing on May 25 - Ang Mo Kio Avenue 1 and the Tengah Garden Walk executive condominium site.

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PGIM Real Estate acquires 108 Robinson Road for US$107m

The Business Times, 28 Apr 2021, Wed

By Michelle Zhu

PGIM Real Estate has acquired 108 Robinson Road for US$107 million, as part of its deeper push into Asia.

It comes as the real-estate unit of PGIM - the investment management business of Prudential Financial - had raised at least US$970 million in the fourth of its series of Asia-Pacific value-add funds, BT reported in February. 

In a press statement on Tuesday, Benett Theseira, PGIM Real Estate's head of Asia-Pacific, said the acquisition signals "our strong conviction in the recovery of the Singapore office market, as well as our proactive stance for real estate investments in the Asia-Pacific region". 

BT understands the seller of 108 Robinson Road is local private equity firm Sin Capital Group, which is in the midst of conducting a tender for the sale of Fullerton Healthcare Corp based in the building.

Sin Capital Group is led by David Sin, who is also Fullerton Health's executive deputy chairman and group president.

The transaction was first reported by real estate intelligence firm Mingtiandi. 

Formerly known as Finexis Building, 108 Robinson Road is a 12-storey freehold building in the central business district (CBD).

PGIM Real Estate said it deemed the property a rare freehold office asset, and its acquisition an "opportunistic (one) that offers numerous asset enhancement exit strategies".

Mr Theseira added: "With employers encouraging staff to return to the office and the strengthened position of Singapore as a leading regional financial and technological services hub, we expect to see continued growth in demand for office space in the CBD."

PGIM Real Estate had told BT that the latest fund, AVP IV, will invest in distinct and executable value-add and selective opportunistic strategies across Asia-Pacific real estate. These assets include offices, logistics, residential and retail properties, in both mature and emerging markets.

The firm intends to initiate an asset enhancement programme for the building which will include a facade upgrade and a new office lobby.

This is considering that its area and surroundings are expected to be further uplifted by ongoing refurbishment and redevelopment works to several properties in the vicinity, it said. 

It also plans to enhance the ESG (environmental, social and governance) quotient of the asset by, among others, conducting an overhaul of the building's mechanical and electrical systems to achieve the Building and Construction Authority's Green Mark Gold certification.

Earlier this month, BT reported that the sale of Fullerton Health may be facing setbacks despite drawing eight non-binding bids in its first round.

Market sources had told BT that potential investors were unconvinced by Fullerton Health's pitch that the Covid-19 pandemic had led to a "block buster" 2020 for the medical services provider.


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