Mohamed Sultan Road building sold for $35.8m

Source : Business Times - 12 Mar 2009

A COMPANY owned by a member of the family that developed International Plaza has bought the freehold Le Mercier House in Mohamed Sultan Road for $35.8 million.

The buyer of 65 Mohamed Sultan Road, Ka$h International Pte Ltd, also owns the property next door. The company is controlled by Cheong Keng Hooi, who is also a director of International Associated Company, the group that developed International Plaza in Tanjong Pagar.

The sale of 65 Mohamed Sultan Road was a private treaty deal brokered by Isabel Redrup Agency Pte Ltd.

The agency said that the property was sold by the Le Mercier family, which has occupied the building for 10 years and is still running its high-end furniture store there.

It added: ‘The Le Mercier’s store will rent back the four-storey building in the short term now that the sale is completed, but are looking for more upmarket premises.’

The property, which is zoned for warehouse/resi- dential use, can be converted into a 15-storey block of apartments, according to Isabel Redrup managing director Susan Ye.

‘The new owners also own the adjacent lot, so it makes sense to amalgamate the lots and rebuild them together,’ she said.

‘Although the building sits on about 14,200 sq ft of land currently, with 52,000 sq ft of built-up (area), it has a plot ratio of 2.8, so rebuilding it will not allow for more than 39,000 sq ft of gross floor area (GFA) in the future.’

Plot ratio is the ratio of maximum permissible gross floor area to land area.

Analysts say that the $35.8 million sale price works out to about $900 per square foot per plot ratio based on a 2.8 plot ratio - hence a maximum GFA of about 39,000 sq ft.

If the authorities were to allow the existing 52,000 sq ft GFA to be retained in a new development on the site, the unit land price would be lower at about $688 psf per plot ratio.

A seasoned property consultant reckoned that a development charge is probably not payable to redevelop the site.