The building agreement for the Capitol sale site was signed yesterday, between the Singapore government and the consortium that will oversee the transformation of the site into a mixed-use development, comprising retail, residential, hotel, arts and entertainment facilities.
The S$750 million mixed development project will include 60 to 70 luxury apartments which are likely to be launched in the third or fourth quarter this year.
A 15-storey development with shops, eateries and apartments will be developed to complement the conserved heritage buildings — Capitol Theatre, Capitol Building and Stamford House — to create a unique lifestyle destination for tourists and locals in the Civic District.
The existing street between Capitol Theatre and Stamford / Capitol Building will be converted into a pedestrianised galleria lined with eateries, complete with a glass canopy covering to provide weather-protection.
Capitol Theatre is set to be restored and upgraded into an 800- to 1,000-seat cinema-cum-performance theatre, while Stamford House and Capitol Building will be transformed to house a new luxury hotel.
The consortium has secured debt financing from OCBC. The gearing ratio of the project could be around 70 percent, according to market watchers.
Internal rates of return will be “very fantastic… more than the teens”, said Pua Seck Guan, CEO of Perennial Real Estate. He and his co-investors own a 40 percent stake in the consortium developing the retail-theatre, hotel and residential project on the Capitol Site.
The consortium is in “a very comfortable position” regarding its breakeven costs for all the project’s components, considering the competitive price it paid for the site at S$250 million or about S$460 psf ppr.
“We can make very good money from this project, but it’s not just about making money. We must do justice to this project,” he said.