UNITED Engineers (UE), owned by Chinese developer Yanlord Land, has put up for sale a 50 per cent stake in its proposed redevelopment of 79 Anson Road for S$325 million.
The 28,163 sq ft site is zoned for commercial use, with an allowable gross plot ratio of 8.4 and a building height control of up to 35 storeys.
Provisional permission was granted in 2022 by the Urban Redevelopment Authority (URA) to redevelop the site into a 28-storey mixed-use project with offices, retail space and serviced apartments. Plans include 10 storeys of Grade-A office space and 12 storeys of 255 serviced apartments operated by Park Avenue, which is UE’s hospitality arm.
Permission was also granted under the Central Business District Incentive (CBDI) Scheme for a 25 per cent increase in gross floor area (GFA) from 289,185 sq ft to 361,465 sq ft.
UE bought freehold 79 Anson Road in late-2012 for S$410 million from Singapore’s Central Provident Fund Board and German fund manager SEB. UE’s sale of a 50 per cent interest in the project has a 99-year leasehold tenure that starts from the date of completion of the sale and purchase of the stake, after which ownership reverts to UE.
At the indicative guide price of S$325 million for the 50 per cent stake, the land rate for the sale works out to about S$1,800 per square foot per plot ratio (psf ppr).
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Joint marketing agents CBRE and JLL noted that over the past eight to 10 years, Tanjong Pagar has undergone rejuvenation, and more Grade-A office buildings and hotels have come up in the area.
New residential developments under construction include Skywaters Residences, which is being developed on the AXA Tower site, and the rebuilding of Fuji Xerox Towers into another mixed-use project, Newport Plaza. Keppel South Central has just been completed, with Manulife signed as an anchor tenant in the 33-storey commercial tower; nearly half the office space and rental units there have either been committed or “being actively negotiated”.
Less than a week ago, the government announced the extension of the CBDI Scheme for another five years, widening its scope to also include the Cecil and Anson areas.
Ting Lim, head of capital markets for JLL Singapore, said: “In today’s market, investors are seeking higher returns, with more dry powder allocated to opportunistic strategies. This shift reflects a clear movement up the risk curve amid the heightened interest rate environment.”
Michael Tay, head of capital markets at CBRE, noted: “Currently, there is a lack of CBD commercial development sites on URA’s Government Land Sales (GLS) programme, so the market is facing limited land supply for office and hotel sites. This is thus an attractive proposition for investors seeking development opportunities within the CBD.”
Yanlord, which acquired UE in a takeover and subsequently delisted the company in 2020, fell into the red in 2023. The real estate group reported a net loss of two billion Chinese yuan (S$378.9 million) in the second half of 2023, reversing from a net profit in H2 the year before.
It posted reduced losses of 486 million yuan in the first half of 2024. In the period the year before, it booked a net profit of 1.1 billion yuan. This was due to a write-down of net realisable value of completed properties for sale and properties under development, as well as an increase in net impairment losses on financial assets.
DBS Group expects Yanlord to record net losses for financial year 2024/25, its research team said in a report issued in October 2024.
The expression-of-interest exercise for 79 Anson Road closes on Apr 9.
