Conservation clause in Golden Mile Complex en bloc a tough sell: Analysts

SINGAPORE — The iconic Golden Mile Complex on Beach Road has been relaunched for sale, two months after its first tender closed without a buyer, but with the terms unchanged, analysts say it will continue to be a tough proposition for developers.

The tender for the 46-year-old building was relaunched on Wednesday (March 27), with the same condition as before, that the buyer will have to retain the existing 16-storey façade.

It also carries the same price tag of S$800 million.

Managing agent Edmund Tie & Company noted in a statement that the buyer would still be able to redevelop almost 86,000 sqm of the site.

Golden Mile Complex was first launched for sale on Oct 31 last year in a tender exercise that lasted three months. This second exercise will be open for only a month, until April 25.

ANALYSTS: CHANCES OF A SALE ARE SLIM

But property analysts told TODAY they think it is unlikely to end in a deal.

Mr Chris Koh, the director of property firm Chris International, said developers are likely put off by the Urban Redevelopment Authority’s planning advice for the site, which states that the main building is subject to conservation.

“A planning advice from the URA — just shy of a gazette — is still as good as saying that they want the building conserved (over the long haul),” he said.

It will subject the building’s developer indefinitely to a set of restrictions that will require a “painstaking effort” to overcome, he said.

In most en bloc sales, he noted, a buyer would be able to tear down the existing building and develop several new ones in its place. But it is not the case here.

“If I need to maintain a 16-storey block, cannot touch its exterior, and can only touch its inside, there is no margin to play with to incorporate more units internally.”

Mr Ku Swee Yong, the chief executive officer of real estate brokerage firm International Property Advisor, agreed, saying that the conservation clause provides “no space” for a developer to construct more floor areas to maximise the site’s plot ratio.

Mr Koh also noted that there are nearby plots that are going to be launched for sale soon, such as the site on which Sim Lim Square sits, that will further “flood” the en bloc market.

Already, developers are “picky” and “being very cautious” as there have been dozens of recent en bloc sales, he said.

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NOT A LOST CAUSE

Nonetheless, Ms Swee Shou Fern, the executive director of investment advisory at Edmund Tie & Company, said the firm is in talks with a number of interested developers.

These include local developers and consortiums including overseas developers, she said.

Mr Nelson Lim, the key executive officer of C&H Properties, said this en bloc bid is not a lost cause, adding that there can be a certain charm in mixing the old and the new.

The location is a draw, too, he noted.

“It is in an up-and-coming area that commands a premium.”