central square

Located at 20 Havelock Road, Central Square will be redeveloped into a mixed-use development, with a serviced residence, retail and office units. Source: Google Maps

City Developments Limited (CDL) is set to redevelop its Central Mall properties, including its surrounding area, into a large-scale mixed-use development, it announced on Thursday (2 December).

This comes after the proposed acquisition of Central Square for $315 million.

Notably, CDL’s wholly-owned subsidiary, CDL Constellation, has entered into a put and call option agreement to purchase Central Square from Far East Hospitality Real Estate Investment Trust (Far East H-REIT) for $313.2 million as well as the reversionary leasehold interest from OPH Riverside for $1.8 million.

Situated at 20 Havelock Road, Central Square is a 99-year leasehold commercial and residential development, comprising a serviced residence as well as commercial spaces including retail and office units. It has a remaining lease tenure of about 72 years.

CDL revealed that the transaction includes “an incentive payment of up to $18 million above the purchase consideration, subject to certain conditions being met by 31 December 2023, including getting planning approval for residential use”.

In an SGX filing, Far East H-REIT noted that the divestment consideration for the property represents a 57.9% premium on the $198.3 million independent valuation as of 31 December 2020 and a 70.8% premium on its $183.3 million original purchase price in August 2012.

CDL presently owns the Central Mall site, which spans 81,660 sq ft. It comprises the freehold seven-storey Central Mall (office tower) and a cluster of conservation shophouses nestled on a 99-year leasehold site that comes with a remaining lease of about 71 years.

Upon completion of Central Square’s acquisition in Q1 2022, CDL intends to redevelop all the sites under the Strategic Development Incentive (SDI) Scheme of the Urban Redevelopment Authority (URA).

“The Outline Permission obtained for the redevelopment of the existing sites into a mixed-use development allows for commercial, hospitality and serviced apartment components, potentially yielding a gross floor area (GFA) uplift of 67% to approximately 735,500 sq ft from the current GFA of 441,650 sq ft,” said CDL.

CDL Group CEO Sherman Kwek shared that Central Square’s acquisition crystallises the group’s master plan “to shape precinct’s transformation into a new and vibrant lifestyle hub”.

“This rare placemaking opportunity augments our role in rejuvenating the Singapore River precinct and aligns with our enhancement strategy to unlock the latent value of our matured assets,” he said.

“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 value for all stakeholders in this precinct.”

He added that it also marked their third rejuvenation initiative within the Central Area.

CDL, along with CapitaLand Development, is also redeveloping the former Liang Court site into an integrated project.

It has also started the redevelopment of the former Fuji Xerox Towers at 80 Anson Road.

The proposed redevelopment will consist of a 45-storey mixed-use integrated project, of which 40% will be set aside for retail and office purposes, 35% for residential and 25% for serviced apartments.

The residential component, comprising around 256 units, is set for launch in 2H 2022.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.