Delfi Orchard up for collective sale at $438 million guide price

Citi Commercial Pte Ltd

SINGAPORE - Delfi Orchard, a 40-year-old strata-titled building that is majority held by City Developments Ltd (CDL), is up for collective sale at a $438 million guide price.

The 11-storey complex comprises 150 strata-titled units (127 shops and 23 apartments), of which 126 are owned by CDL.

Situated at 402 Orchard Road, Delfi Orchard sits on a 20,264 square feet (sq ft) freehold site zoned for commercial use, with height control of up to 20 storeys.

At the $438 million guide price, the property is being marketed at about $3,397 per square foot per plot ratio (psf ppr) assuming full commercial use, said marketing agent Savills Singapore on April 18.

This would include a land betterment charge of $7.6 million, and is based on redevelopment of up to 131,186 sq ft – the site’s approved development baseline.

The most recent commercial en bloc deal done in the Orchard area was for freehold commercial complex Ming Arcade, which was sold for $172 million in December 2022. The sale price worked out toS$3,125 psf ppr, marking a record-high land rate in the market.

Earlier in 2022, freehold Tanglin Shopping Centre was sold for S$868 million, or $2,769 psf ppr, to the Tanoto family’s Pacific Eagle Real Estate.

Just off Orchard Road, the Scotts Square mall was put on the market in January but has not yet closed a sale at its $450 million asking price, which pitches the retail podium at S$3,438 psf ppr.

And in September 2023, a deal was struck to sell Far East Shopping Centre to Chinese billionaire Du Shuanghua for about $910 million or $3,421 psf ppr. However, the deal unravelled when the buyer’s redevelopment proposal, submitted under the government’s Strategic Development Incentive (SDI) scheme, was rejected by the authorities.

The Delfi Orchard collective sale would mark CDL’s third major divestment in two years, after it sold its strata holdings in Tanglin Shopping Centre and Golden Mile Complex in 2022.

The group booked a pre-tax gain of $256.3 million after completing the collective sale of Tanglin Shopping Centre, and $75.6 million after Golden Mile Complex’s collective sale, in its 2022 financial year.

CDL’s past annual report indicated that it bought 118 units at Delfi Orchard in 1991. The properties were reported to have been acquired for $95 million from Japanese developer Yamasin.

The group went on to buy Palais Renaissance next door from the same developer in 1993, for $115 million. It completed a $7 million asset enhancement of the building in 2022.

CDL’s portfolio also includes Orchard Hotel and Claymore Connect in the area, a stake in the St Regis Singapore hotel nearby, as well as stakes in The Singapore Edition hotel and Boulevard 88 condo along Cuscaden Road.

At Delfi Orchard, owners of the 23 apartments stand to pocket between $2.2 million and $4.6 million each, Savills said in response to queries from The Business Times.

Commercial unit owners stand to get between approximately $984,000 and $24 million for each unit. The bulk of proceeds would go to CDL as the group owns the majority of titles in the building.

Delfi Orchard has been built up to its approved development baseline of 131,186 sq ft, equivalent to a plot ratio of 6.474, over the site’s approved Master Plan ratio of 4.9.

Jeremy Lake, Savills Singapore’s managing director of investment sales and capital markets, said: “The successful collective sales of Tanglin Shopping Centre and Ming Arcade brokered by Savills, are a testament to the strong attributes of the Orchard Road locale… Delfi Orchard is another rare opportunity for developers looking to acquire a prime redevelopment site at the gateway of Orchard Road.

“With exciting plans to link the arts, entertainment and shopping experience of Orchard Road as a lush urban corridor, Delfi Orchard is strategically placed to benefit from a major redevelopment,” he added.

Hotel and/or residential use may be possible, subject to approval by the Urban Redevelopment Authority.

The buyer may also consider applying for the SDI scheme, which allows buyers to extend the gross floor area of a redeveloped building on condition that they engage in a joint integrated redevelopment with adjacent sites.

The public tender for Delfi Orchard closes at 3 pm on May 27.

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