A major Singapore mall deal has been struck by Frasers Property, controlled by Thai billionaire Charoen Sirivadhanabhakdi, with the acquisition of the remaining portion of The Centrepoint mall for S$392 million ($310 million), signaling a bold move amidst Singapore’s thriving property market. This strategic acquisition provides Frasers Property with enhanced flexibility for future redevelopment endeavors in a prime Orchard Road location.
The Deal
The Singapore-listed developer is set to acquire the remaining portion of the seven-story rear block of its flagship retail complex, The Centrepoint, situated in the bustling Orchard Road shopping precinct. The deal places a valuation of S$2,577 per square foot on the rear block, encompassing 66 residential apartments and 66 retail units, based on the property’s maximum plot ratio and leasehold top up, as per the official statement. This acquisition strengthens Frasers Property’s control over the site, paving the way for comprehensive rejuvenation plans.
Frasers Property’s Strategic Play
Prior to this transaction, Frasers Property held a 52% stake in the rear block, which is situated on a 99-year leasehold land with 52 years remaining on the lease. The company also owns approximately 96% of the main mall, which sits on a freehold plot facing Orchard Road, as well as 51 Cuppage Road, a 10-story office building connected to the mall. Soon Su Lin, CEO of Frasers Property Singapore, emphasized the significance of this move, stating,
“We are pleased to strengthen our ownership of The Centrepoint. This gives us greater flexibility to unlock the site’s long-term potential, including assessing broader rejuvenation plans for the area.”
The Centrepoint’s Redevelopment Potential
The acquired rear block of The Centrepoint occupies a land area of approximately 44,700 square feet (4,153 square meters) and has the potential for redevelopment into a 10-story building with a maximum gross floor area of 250,320 square feet, leveraging an allowable plot ratio of 5.6, according to Savills Singapore, the brokerage firm that facilitated the deal. To restore the lease to 99 years and maximize the property’s plot ratio, Frasers Property would need to allocate an additional S$253.1 million.
Singapore mall deal and Market Dynamics
According to Vijay Natarajan, an analyst at RHB Singapore, the acquisition of the rear block positions Frasers Property to redevelop The Centrepoint into a mixed-use property, potentially incorporating residential, serviced apartment, and retail components. “Likely the entire complex will be redeveloped taking advantage of [government] incentives,” he noted. This major Singapore mall deal underscores the robust appetite for commercial properties in Singapore, with other property owners capitalizing on investor demand. Royal Holdings, controlled by Raj Kumar and his son Kishin RK, recently put up for sale a cluster of shophouses adjacent to The Centrepoint. Similarly, OUE Commercial REIT, controlled by Indonesian tycoon Mochtar Riady and his family, is seeking buyers for One Raffles Place, a prominent skyscraper in Singapore’s central business district.
Looking Ahead
With an estimated net worth of $12.2 billion, Charoen Sirivadhanabhakdi is a prominent figure in Thailand’s business landscape. Beyond his controlling interest in Frasers Property, he also holds significant stakes in Thai Beverages, the maker of Chang Beer, packaging company Berli Jucker, and Thai property developer Asset World. Frasers Property’s strategic acquisition of The Centrepoint’s rear block represents a pivotal step towards unlocking the site’s full potential, positioning the company for long-term growth and success in Singapore’s competitive property market. This major Singapore mall deal will allow the company to explore innovative development options and capitalize on the evolving needs of the retail and residential sectors.
