31-08-2012: Pearls Centre will be acquired and torn down for MRT

Valuation suspense grips Pearls Centre	Business Times: Fri, Aug 31
[SINGAPORE] Consultants peg the market value of the strata-titled Pearls Centre in Chinatown between $450 million and $600 million. One consultant suggested that the government compensation may fall within this range, or 5 to 10 per cent either side of the valuation. According to Dennis Chiu, managing director of the Tang Group of Companies, talk of launching the property onto the collective sale market was floated about three months ago, and a sales committee was formed recently. Discussions were at a preliminary stage, and the committee was supposed to select a valuer yesterday, said Mr Chiu, whose family controls the Far East Consortium International Limited group in Hong Kong. Tang Group, which is developing Dorsett Regency Hotel and Dorsett Residence near Chinatown, owns about 47 per cent of Pearls Centre, which spans some 47,000 sqm (about 505,903.3 sq ft). Of this, about 17 per cent is office space, 43 per cent is shopping space, and 10 per cent is residential. The remaining 30 per cent is carpark space, said Mr Chiu. Said Donald Han, special adviser at HSR: "This project is fairly unique because it just appointed a collective sales committee so the grounds for wanting to be paid based on potential collective sales pricing could be valid. But then again, if you're looking strictly at the provisions of the Land Acquisition Act, compensation will be made based on market value. So that will depend on how the government treats the property, and how it evaluates the current value of the site." According to a Singapore Land Authority spokesperson, compensation will be pegged to the market value of the property, taking into account past transactions, the condition of the property, and other reasonable expenses including legal fees, relocation costs, and stamp duties. According to Mr Han, collective sales that do transpire tend to fetch a 20-30 per cent premium over current market value. That being said, this property has a leasehold tenure, so any premium depends on whether the government will allow the current stakeholders to refresh their lease. According to David Ng, executive director, valuation, at DWG, retail units at Pearls Centre are transacting in the range of $1,100-$2,500 psf depending on the size and floor on which the unit is located. Residential apartments range from about $850-$1,050 psf. "Residential units on higher floors may fetch between $950 psf and $1,050 psf while those on lower floors may fetch between $850 psf to $950 psf." he said. Added a market watcher who did not want to be named: "This is a strata-titled building with individual owners; some may own a couple of units or a whole floor. These guys will be the ones to watch for, whether they try to negotiate for better prices. If they fight for a higher price, smaller individuals may come into the picture." Opened in 1969, the 23-storey Pearls Centre currently houses 44 residential units and 199 commercial units. Occupants have 24 months to vacate, while the rest have 18 months to do so. The MP for Tanjong Pagar GRC, Indranee Rajah, will meet tenants of Pearls Centre tomorrow to understand better their concerns about having to move out within the next two years. Following the acquisition of Pearls Centre, the site will be integrated with the adjoining state land for a high-density mixed-use development to optimise land use around the future Thomson Line station at Outram Park. According to a spokesperson from the Urban Redevelopment Authority, the gross plot ratio for both sites is 5.6. The total area after amalgamating the land is around 2.8 ha (0.53ha from Pearls Centre and 2.29ha from the vacant state land). Said DWG's Mr Ng: "The (Pearls Centre) site is currently zoned commercial, which is one of the highest valued use in the property market. However, if it is rezoned as a white site, it could be as successful as the Clarke Quay site that was won in 2000 and developed in a retail and SOHO development with an MRT station below... If fully commercial, it would mirror the Robinson Road/Cecil Street site sold in September 2011 at $9,494 psm per plot ratio (approximately $311million)." Source: Business Times  Surprise for Pearls Centre tenants Straits Times: Thu, Aug 30 NEWS of the Government's impending acquisition of Pearls Centre yesterday took tenants and residents by surprise. Neither shopowners, residents nor the building's management saw the move coming, with most of them saying they have no choice but to accept it. The Land Transport Authority (LTA) said it would acquire the centre in Eu Tong Sen Street to build the new Thomson Line. The Chinatown complex will be torn down and a high-density, mixed-use development built in its place. A Thomson Line tunnel will run under part of the building, said the LTA. That new development will be integrated with Outram Park station, an interchange station for the East-West Line, North-East Line and Thomson Line. Pearls Centre's 243 tenants have two years to move out. The Singapore Land Authority said they will be compensated according to the market value of their properties. TCM Chinese Medicines managing director Lim Chin Kiat, 81, said the announcement was "very sudden" and expressed concern about finding a new store for his business. "My business has been good all these years. If I move, how will my customers look for me?" he said. "The demolition is quite a pity, especially with the long history of Pearls Centre." The 23-storey building is a strata-titled property with a 99-year lease that began in 1969. It has a wide range of shops including hair salons, eateries, tailors, massage parlours and traditional Chinese medicine clinics. There are also 11 floors of residential units. Ms Helen Tai, a property executive for the building management, said Pearls Centre was to be put up for an en bloc sale and discussions were at a preliminary stage. A committee was formed last month, and to date all residents and landlords have proceeded with the valuation process, she said. The complex also houses the Yangtze Cinema, known for its R21 films. Mr Richard Sng, who has worked at the cinema for two years, said its patrons comprise mostly elderly men. "When we change movies every Thursday, they will come. Some watch movies the whole day to pass the time. It's almost like an elderly home," he said. In recent years, shopowners have complained that the management failed to keep the complex in good condition. Escalators break down often and air conditioning is nearly non-existent. Mr Daniel Koh, 64, who owns tailor shop Satana Fashion, said the poorly maintained complex has driven people away. Yet, some remain reluctant to leave the centre. Resident Agnes Low, 49, said she would miss living in a convenient location where "everybody knows everybody". Ms Indranee Rajah, the MP for the area, said she would be meeting affected tenants this Saturday to understand their concerns. Still, at least one tenant regards the acquisition as a form of closure. Mr Tony Chan, 65, opened his menswear tailor shop in 2002 and finds running it "quite a good way to pass time". Having been in the business for 40 years, he plans to retire. He said: "It's a good thing, because the Government has given me a definite end date." [e-mail] [e-mail] Source: The Straits Times