About Central Square / Central Mall Collective Sales

CENTRAL-MALL-CENTRAL-SQUARE-CDL

City Developments Limited (CDL), a prominent property developer, is set to make a significant move by acquiring Central Square for a substantial sum of S$315 million. This strategic acquisition is a pivotal part of CDL’s comprehensive plan to revamp not only its Central Mall properties but also the entire surrounding area. The ambitious vision is to transform this locality into a dynamic mixed-use lifestyle hub that will undoubtedly capture the essence of modern living.

The acquisition process, executed through CDL’s subsidiary, CDL Constellation, involves a put and call option agreement. This agreement allows CDL to purchase Central Square from FEHT for an amount totaling S$313.2 million and also secures the reversionary leasehold interest of approximately 1.5 years from Far East Orchard subsidiary, OPH Riverside Pte Ltd, for a sum of S$1.8 million. However, the deal doesn’t stop here; there is an additional incentive payment of up to S$18 million on the table, subject to specific conditions, including securing planning approval for residential use by December 31, 2023.

To put this acquisition into perspective, independent valuer Savills has assessed the property’s open market value as of October 25 at S$271.4 million. This acquisition represents a substantial premium of 15.4 percent above Savills’ valuation and an impressive 57.9 percent increase above the book value of the property’s leasehold interest as of the end of September.

Considering all factors, FEHT is expected to receive estimated net proceeds of S$310.3 million from this transaction, excluding the incentive payment. These funds can be utilized for various purposes, including debt reduction, potential acquisitions, distributions to stapled securities holders, or financing general corporate and working capital needs.

In a pro forma analysis for FY2020, it’s projected that the dividend per share will increase to 2.46 cents after the completion of this divestment, compared to 2.44 cents before, assuming the divestment had occurred on January 1, 2020.

 

Central Square Location

Central Square, nestled at 20 Havelock Road, stands as a symbol of potential and opportunity. This commercial and residential development boasts a 99-year leasehold, currently with 70.7 years remaining, held by Far East Hospitality Trust (FEHT). The development encompasses serviced residences along with a versatile range of commercial spaces, including offices and retail units, as highlighted by CDL in their official statement.

 

Potential of the Site

This strategic acquisition extends CDL’s ongoing commitment to enhancing the Central area. In addition to the Central Square project, CDL is actively redeveloping the former Liang Court site in collaboration with CapitaLand Development, creating an integrated project that will include office, retail, residential, and serviced apartment components. Moreover, CDL has already initiated the redevelopment of its former Fuji Xerox Towers at 80 Anson Road, with plans for a 45-storey mixed-use integrated project that encompasses office and retail spaces, residential units, and serviced apartments.

In light of these developments, CDL remains focused on shaping the landscape of the Central area and contributing to its transformation into a thriving and modern lifestyle hub. The potential for growth in this enlarged area is substantial, with a projected gross floor area uplift of 67 percent, expanding from the current 441,650 sq ft to an impressive 735,500 sq ft. It’s worth noting that CDL’s redevelopment plan aligns with the Urban Redevelopment Authority’s strategic development incentive scheme, further underscoring the company’s commitment to innovation and urban development.

In the words of CDL’s Chief, Sherman Kwek, “The strategic acquisition of Central Square complete our master plan to change the precinct’s transformation into a new and vibrant lifestyle hub. With the enlarged site, we can take a multi-faceted approach to the planning and design of the entire area and shape the public realm to maximise potential for stakeholders in the precinct.”

This announcement marks CDL’s third major initiative in enhancing the Central area, solidifying their reputation as a key player in Singapore’s urban development and property market. As they continue to shape the city’s landscape, CDL’s vision for a modern, dynamic, and vibrant Central area is becoming a reality, promising a brighter future for all stakeholders involved.

In the wake of this exciting news, CDL shares have been closely watched, with a minor decline of S$0.12 or 1.7 percent to S$6.78, while FEHT units saw a slight decrease of S$0.005 or 0.9 percent to S$0.575. In contrast, Far East Orchard shares experienced a positive trend, gaining S$0.02 or 1.9 percent to S$1.09.

With this acquisition and ongoing projects, CDL is undoubtedly poised for continued growth and innovation in the property development landscape, promising a more vibrant and dynamic Central area for the future.

 

Central Square
CENTRAL MALL CENTRAL SQUARE CDL

City Developments Limited (CDL), a prominent property developer, is set to make a significant move by acquiring Central Square for a substantial sum of S$315 million.

Product SKU: Central Square

Product Brand: Property Review

Product Currency: SGD

Product Price: 2550000

Product In-Stock: InStock

Editor's Rating:
5