CDL has announced that it will develop its Central Mall properties and the surrounding area into a large-scale mixed-use development.
This follows the proposed $315 million acquisition of Central Square. Located at 20 Havelock Road, Central Square is currently a 99-year leasehold commercial and residential development, with a remaining lease tenure of approximately 72 years.
It comprises a serviced residence and commercial spaces including offices and retail units.
CDL had entered into a put and call option agreement to acquire the asset from DBS Trustee, which is, in turn, a Far East Hospitality Real Estate Investment Trust (FEHT) trustee for $313.2 million and the reversionary leasehold interest from OPH Riverside for S$1.8 million. The asset is currently held by Far East Hospitality Trust.
The transaction also includes an incentive payment of up to $18 million above the purchase consideration, subject to certain conditions being met by Dec 31, 2023, including getting planning approval for residential use.
Far East Hospitality Trust's manager announced divestment proceeds for the transaction are likely to be $112 million in excess of the book value of the the property, Village Residences Clarke Quay, which was valued at $198.3 million as at Sept 30. 2021. The transaction is likely to complete in March.
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Upon completion of the proposed Central Square transaction in Q1 2022, CDL plans to redevelop all the sites under the Urban Redevelopment Authority (URA) Strategic Development Incentive (SDI) Scheme.
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.
CDL will be working closely with the authorities to further enhance the viability of the redevelopment scheme and potentially add in a residential component.
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The company is also currently redeveloping the former Liang Court site jointly with CapitaLand Development into an integrated project.
It will comprise the 696-unit CanningHill Piers, CanningHill Square with F&B and retail outlets, a 475-room hotel operated under the Moxy brand by Marriott International and a 192-unit serviced residence with a hotel licence operated under the Somerset brand.
Furthermore, CDL has also commenced the redevelopment of its former Fuji Xerox Towers located at 80 Anson Road under the CBD Incentive Scheme.
The proposed redevelopment will comprise a 45-storey mixed-use integrated project.
Subject to authorities’ approval, 40% will be dedicated for office and retail purposes, 35% for residential and 25% for serviced apartments. The residential component, comprising about 256 units, is slated for launch in 2H 2022.
Shares of CDL closed on Dec 2 at $6.78, down 12 cents or 1.74% lower than its previous close.
