Shenton House relaunched for collective sale at $590 mil, with 70% of owners agreeing to lower price of $538 mil

for redevelopmentA relaunch of Shenton House, the commercial building on Shenton Way in the CBD, has started with a reserve price of $590 million and a tender close date of Nov 1. The collective sale committee has already started to obtain support from the owners of the 1970s relic, with 70% of them agreeing to sign a Supplemental Joint Agreement (SJA) to lower the reserve price to $538 million.

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Shenton House, located in the Central Business District with triple frontage along Shenton Way, Park Street and Shenton Lane, consists of 203 commercial units and a carpark. Owners of the 99-year leasehold development have agreed to a reduced reserve price under the SJA of $538 million, which is estimated to work out to a unit land rate of approximately $1,885 psf ppr at the gross plot ratio (GPR) of 14.0, inclusive of an estimated land betterment charge and a lease top-up premium and assuming a proposed redevelopment into a 60% commercial and 40% residential mixed-use project under the CBD Incentive Scheme (CBDIS) with a 25% GPR uplift.

The SJA requires at least 80% of the owners’ support (by strata floor area and by share value) in order to reduce the reserve price. The collective sale committee is confident of achieving this and closing the tender by Nov 1.

Tan Hong Boon, executive director at JLL Capital Markets, Singapore, said “Shenton House is the last remaining redevelopment opportunity at this stretch of the prime Shenton Way thoroughfare. The high demand for brand new Grade A office spaces in the CBD, coupled with complementary uses such as a premier business hotel or residential apartments, will further contribute to the rejuvenation of Shenton Way.”

“Given the site’s stellar location and seamless connection to Shenton Way MRT, coupled with the added potential to enjoy additional GFA under the CBDIS, we are confident that developers will continue to show interest in the site,” Tan added.

The CBDIS is set to expire on Nov 26, 2024, five years from the date of the gazette of the Master Plan 2019, and is eligible for 25% bonus gross floor area. It offers the possibility to redevelop Shenton House into a mixed-use commercial with residential development or a hotel with a GPR of 14.0.

The relaunch of Shenton House is already generating interest from potential developers in response to its attractive location, and as a last-remaining redevelopment opportunity. With the collective sale committee confident of achieving the required support to lower the reserve price, the tender is also likely to be successful.