Buildings that are high-rise in central Singapore.
Royal Group of Companies–controlled by billionaire Asok Kumar Hiranandani–is buying the Ming Arcade on the tip of the Orchard Road purchasing district for S$172 , setting a track record rate for Singapore commercial properties as the Lion-City continues to defy the global property down-turn.
The freehold property is situated in the middle of luxury hotels as well as top residential developments, including The Four Seasons Hotel & St Regis Hotel and Residences — was auctioned off for S$3,125 per square meter by plot proportion, which beat the previously set price by Hong Kong casino- billionaire’s Pansy Ho’s Shun Tak Holdings in 2018 when it purchased Park House condominium for S$375.5 million (equal to about S$2,910 per square foot for a plot ratio of) Marketing agency Savills Singapore said in a statement on Friday.
“Ming Arcade was an exciting and lively urban center in the 80s. We are thrilled and excited to begin the rebirth of this enclave in the Orchard Road precinct and restore the splendor it has earned,” Royal Group of Companies-chairman, Asok Kumar Hiranandani, as well as the son of Asok Bobby Hiranandani, who is the co-chairman of the family office, declared in the announcement. “At Royal Group of Companies, we have established an example of improving the communities we invest in and develop, and we are looking to achieve new heights.”
The Royal Group plans to re-develop the seven-story Ming Arcade on 12132 square feet (1,127-square-meter) parcel of land on Cuscaden Road. The property is classified as commercial, with a surface area of 55.046 sq feet. The building can be constructed with a maximum elevation that is 20 stories, as per Savills.
Ming Arcade was hotly contested in the market. The property was a hotly contested sale. Royal Group offered to buy the property for a 34% higher price than it was listed. “A significant number of buyers looked at Ming Arcade, and we received numerous offers,” Jeremy Lake, the director of capital markets and investment sales for Savills Singapore, said in the announcement.
The deal results from several commercial buildings in Singapore being sold this year, with investors looking for greater yields and considering the possibility of renovating old buildings in the city-state, which is widely regarded as a safe place to invest. This year’s notable transactions include purchasing Tanglin Shopping Centre (located behind Ming Arcade) to Indonesian-billionaire Sukanto Tanoto’s Pacific Eagle Real-Estate for S$868 million. Royal Group also announced the sale of its roomy 134 rooms SO Sofitel Singapore in the Raffle Place central-business district for S$240 million to Vietnamese-based Viva Land.
Despite a global property slump triggered by the rise in interest rates, and the increased threat of a recession in the world, Savills believes that the total value of investment sales in 2023 will be as high as S$25 billion. This is similar to the amount that was sold the year before. “If rates rise, then the market could witness an increase in demand for large-ticket items by huge private equity investors,” Savills said last week. “They might be looking for old and deteriorating buildings that could be transformed to mixed-use modern developments, for example, green-certified buildings or repurposing them to residential uses.”
Asok Kumar, a co-founder of the former Royal Brothers property group, split from his younger brother Raj Kumar–also a billionaire who runs Royal Holdings/RB Capital along with Kishin, his son–in 2011 after a settlement between their families.
Through the Royal Group, Asok Kumar has a stake in several prime Singapore assets like the Sofitel with 215 rooms Sentosa Resort and The Royal One Phillip office building in Singapore’s Raffles Place CBD. With an estimated net value in the region of $1.7 billion, Asok Kumar was ranked as No. 25 on this list of Singapore’s 50 Most Rich, which was released in September.