Following the strategic purchase of Central Square for S$315 million, City Developments Limited (CDL) announced its plan to convert Central Mall assets and adjacent property into a comprehensive mixed-use complex, Union Square.
Central Square, which is located at 20 Havelock Road, is a business and residential complex that is now under 99-year leasehold, with around 72 years left on the lease. The complex consists of retail establishments, offices, and serviced apartments.
In order to purchase Central Square from DBS Trustee Limited (a trustee of the Far East Hospitality Real Estate Investment Trust) for S$313.2 million and the reversionary leasehold interest from OPH Riverside Pte Ltd for S$1.8 million, CDL has agreed through its wholly-owned subsidiary, CDL Constellation Pte. Ltd.
A possible incentive payment of up to S$18 million2 is also included in the deal, subject to fulfillment of certain requirements including securing planning clearance for residential use.
The 81,660 square foot Central Mall property is now owned by CDL. It includes the freehold, seven-story Central Mall (Office Tower) and a collection of conservation shophouses on a 99-year leasehold plot with around 71 years left on the lease.
The property is conveniently accessible to the Central Business District (CBD), with easy access to major motorways and three MRT stations: Fort Canning (Downtown Line), Clarke Quay (North East Line), and Chinatown (Downtown and North East Line). The site is located along Havelock Road and Magazine Road.
The Urban Redevelopment Authority’s (URA) Strategic Development Incentive (SDI) Scheme calls for the redevelopment of all properties after the projected Central Square purchase in the first quarter of 2022. The granted outline permission permits the conversion of the current buildings into a mixed-use complex with elements of hotel, commercial space, and serviced apartments.
With this redevelopment potential, the present 441,650 square feet of Gross Floor Area (GFA) may increase by 67% to over 735,500 square feet. In order to maximise the redevelopment plan, CDL will work closely with the authorities and may include a residential component.
“The strategic acquisition of Central Square crystallises our vision to reshape the precinct into a vibrant lifestyle hub,” said Mr. Sherman Kwek, Group Chief Executive Officer of CDL. This exceptional chance fits with our plan to maximise the value of older assets and strengthens our involvement in revitalising the Singapore River area.
We may take a more comprehensive approach to planning and design with a bigger site, maximising value for all parties involved. We are dedicated to changing the Central Area’s urban landscape, as seen by the Central Mall and Central Square renovation project.
Concurrently, CDL and CapitaLand Development are working on the renovation of the old Liang Court site to create an integrated project that includes CanningHill Piers, CanningHill Square, a Marriott International hotel named Moxy, and Somerset-serviced apartments.
Furthermore, under the CBD Incentive Scheme, CDL has started to rehabilitate the old Fuji Xerox Towers into a 45-story mixed-use integrated complex with office, retail, residential, and serviced apartment components.