The real estate en bloc sale market got an early boost after a freehold three-storey industrial terrace factory building located at No. 6 Jalan Ampas, off Balestier Rd, was sold to a private developer for $27.5 million.
The private developer is said to be an experienced player in the industrial real estate sector. This will be its first attempt in residential development.
This transaction is also the first collective sale to be completed in 2010.
Based on the selling price and an estimated $18.7 million development charge to finance the re-zoning of the site to residential use, and a 2.8 gross plot ratio, it works out to be around $593 per sq ft per plot ratio.
The three-storey strata-titled industrial factory building is located on a 27,838 sq ft area of land.
Upon re-zoning, the site could be redeveloped into a freehold high-rise residential development with around 77,948 sq ft of gross floor area.
According to some analysts, after factoring the profits as well as financing and marketing costs, the completed development on the site could be sold for about $1,100 psf to $1,200 psf.
The en bloc sale was launched by the owners of the four factory units following the announcement made by the Urban Redevelopment Authority in 2008 that it was prepared to consider re-zoning for residential use.
Tan Hong Boon, Deputy Managing Director of Credo Real Estate, said that the tender for the property was closed to the public on December 10, 2009, and it received five offers and five other interests from property developers.
This en bloc sale was also marketed by Credo.
“Balestier has over the years emerged as a popular residential district that enjoys the convenience of being geographically central and having a whole host of commercial amenities along the main road,” said Mr. Tan.
The site is close to Shaw Plaza, which houses a major supermarket, banks, multiplex cinemas and several other commercial establishments.