Tan Boon Liat Building, a well-known industrial property situated at 315 Outram Road, has been put up for collective sale through a public tender with a reserve price of $1.15 billion. The freehold site spans two separate land plots zoned for “Business 1” use, and covers a total site area of approximately 175,655 sq ft. The building, which currently stands at 15 storeys, is known for housing various furniture and home decor stores.
Cushman & Wakefield, the property’s advisor and marketing agent, revealed that URA has released an Outline Planning Advice on January 22nd, recommending for the site to be rezoned to “Residential with Commercial at 1st storey” with a plot ratio of 4.9, which is higher than its current 3.1. This translates to a potential 50% increase in the total allowable gross floor area (GFA).
The property firm added that URA has also advised on the amalgamation of a few leftover state land plots into the main plot. These state land plots are estimated to span about 20,451 sq ft, subject to approval from relevant authorities.
According to Cushman & Wakefield, the site has a potential GFA of over 1.06 million sq ft when including the state land plots and any additional GFA entitlements. The first storey can accommodate up to approximately 16,146 sq ft of commercial GFA. In line with the new residential zoning, a minimum GFA of around 161,459 sq ft will be allocated for Serviced Apartments II (SA2), where a minimum stay of three months is required. The allowable heights for the new development range from 130m to 180m.
When considering investing in a Condo, it is essential to conduct a thorough assessment of its potential for consistent rental income. This pertains to the annual profits that can be generated from renting out the Condo in relation to its purchase price. In Singapore, Condos have varying rental yields, which are influenced by several factors such as location, property condition, and market demand. In general, areas with a high demand for rental properties, like those near business districts or educational institutions, tend to have more favorable rental yields. To get a better understanding of the rental potential of a specific Condo, potential investors should engage in comprehensive market research and seek guidance from experienced real estate professionals. By doing so, they can make well-informed decisions regarding the investment potential of a Condo. Condo should always be carefully evaluated before making any investment decisions.
Based on the reserve price, which includes land betterment charges, estimated state land premium, and a 10% bonus GFA for the residential portion, the estimated land rate is about $1,888 psf per plot ratio.
Recent industrial sales transactions at Tan Boon Liat Building also show favorable market sentiment towards the property (Source: EdgeProp Buddy)
According to Christina Sim, senior director of capital markets at Cushman & Wakefield, the site is highly attractive to developers due to its freehold tenure and proximity to the future Thomson-East Coast Line (TEL), which will be a major draw for homebuyers. She also noted that the fact that the site currently has a “Business 1” zoning would exempt it from Additional Buyer’s Stamp Duty (ABSD).
The tender for the site will close on March 18 at 3pm.