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Wed, Oct 14, 2020 – 4:17 p.m.
UPDATED Wed, Oct 14, 2020 – 4:44 pm
Mediacorp has offered for sale the sprawling 7-acre leased parcel that used to house the iconic Caldecott Broadcast Center through a public tender.
The gross land value for a proposed bungalow remodel at the site is expected to be more than S $ 400 million, including differential premium (DP) and lease improvement premium (UP), CBRE and Showsuite Consultancy said.
This would translate into a land fee of around S $ 540 per square foot (psf), they noted in a joint statement Wednesday.
According to the scheme proposed by the Mediacorp architect for 67 bungalows to be carved on the site, the cost of the land for a potential developer amounts to about S $ 6 million per plot.
At this price, a developer can break even at around S $ 9-10 million per bungalow, according to CBRE and Showsuite.
The new single-family homes in the proposed development, which is part of the Caldecott Hill Estate’s Good Class Bungalow Area (GCB), will likely be priced at S $ 11-14 million, subject to design and configuration.
“This compares favorably with median single-family home prices in Sentosa Cove and GCB in the Midwest,” said the real estate consultants, who have been appointed by Mediacorp to market the asset.
The public tender for the property will close on December 9.
At 752,015 square feet (square feet), the hilltop site served as the national broadcaster’s campus for more than six decades until 2015, when Mediacorp moved to its current location in Mediapolis @ one-north.
The Urban Redevelopment Authority (URA) has granted Mediacorp blanket approval to potentially remodel the site into two-story bungalows with land areas of at least 800 square meters (m2), or 8,611 square feet, per home.
That is a smaller lot size compared to the usual 1400 square meter minimum to subdivide residential land in a GCB Area into GCB, but double the requirement for a bungalow in a non-GCB Area.
CBRE and Showsuite named the potential houses on the site “GCB junior.”
The group’s architect’s subdivision scheme to accommodate 67 bungalow plots is subject to approval by the authorities.
In June, The Business Times (BT) reported that the media and entertainment group may finally be preparing to put its old campus on the market.
Market watchers then told BT that the site, currently zoned for use by civic and community institutions, will have to be rezoned for residential use; this will involve the payment of a DP to the state.
The amount of the DP depends on the scheme proposed by the developer, the timing of the application and the assessment by the Singapore Land Authority (SLA) and the Office of the Chief Assessor.
Additionally, the island’s 99-year-old lease site has a 73-year lease term. That means the developer will also have to pay SLA for a UP lease to complete it with a new 99-year term. An application has been submitted for an approval in principle of this, CBRE and Showsuite said.
According to Michael Tay, CBRE’s director of capital markets for Singapore, more buyers see more affordable rental properties as an opportunity to lock up less equity for their homes, in a market where freehold equity values are high. “By doing so, they free up capital to invest in another property for rental income.”
With the buildings vacant, the site, bounded by Andrew Road, Olive Road and John Road, is now “ready for redevelopment and harmonization with the immediate surroundings of elegant single-family homes,” said Showsuite CEO Karamjit Singh.
Potential “junior GCBs” at the site will serve the underserved middle segment of single-family homes, the market between GCBs and entry-level bungalows, Singh added.
“There has not been a large-scale project of new GCBs, whether ‘junior’ or conventional, for a long time. The closest proxy would be the bungalows at Sentosa Cove, launched between 2005 and 2010, ”he said.
CBRE’s Tay believes that the proposed “junior GCBs” will attract buyers and upgraders looking to own bungalows on a new estate that is also part of a GCB area.
“In addition to the potential for bungalow remodeling, we understand that URA may also be prepared to consider a proposal for the site to be remodeled into a retirement village, subject to a detailed evaluation,” Tay said.
According to the consultants, the last large rental site in the Midwest sold for homes on land changed hands in 2013. It was a 400,000-square-foot site on Coronation Road that was trading for S $ 908 psf, they added.
And within the Caldecott Hill Estate, the prices of freehold GCB parcels have ranged from S $ 1,050 to S $ 1,200 psf in the past two years, the consultants noted.
As there are no direct comparables of “junior GCB” in lease, CBRE and Showsuite cited transactions of other premium single-family homes. Top-of-the-line prices are the new, wholly owned GCBs spanning over 1,400 square meters of land; the two most recent houses sold for an average price of S $ 37.5 million.
The following would be the oldest wholly owned GCBs above 1,400 square meters – 27 of those bungalows changed hands at an average of S $ 27 million in 2019 and 2020.
Meanwhile, during the same period, 12 Sentosa Cove bungalows, which have leasehold tenures and may be owned by foreigners, sold on average for S $ 18.5 million.
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