Cavenagh Gardens, a rare district 9 residential redevelopment site next to the Istana up for sale

SINGAPORE (EDGEPROP) – Cavenagh Gardens, a prime freehold residential redevelopment site in the prestigious Orchard Road district has just been launched for sale via a public tender exercise by sole marketing agent, JLL.

Located next to the Istana, Cavenagh Gardens, along Cavenagh Road in the sought after District 9, consists of three blocks of 172 apartments. Currently zoned for “Residential” use with a gross plot ratio of 2.1 in the 2014 Master Plan, the site spans an area of 128,255 sqft. In-principle approval was granted by the Singapore Land Authority for some 11,800 sqft of State land to be amalgamated with the subject site on 28 February 2018.

Cavenagh Gardens is a mere 600-metre walk from The Centrepoint, which is directly linked to Somerset MRT station. It is also about an 800-metre walk to Plaza Singapura linked directly to the Dhoby Ghaut MRT Interchange Station. With Singapore’s famed Orchard Road shopping district at its doorstep, a myriad of shopping, food and beverage, entertainment and lifestyle services and amenities are readily available. It takes a short 7-minute drive to the CBD and is highly accessible via the Central Expressway (CTE), Orchard Road and Bukit Timah Road.

Cavenagh Gardens

Image Credit: JLL

Situated next to the rich historic Civic and Cultural District, Cavenagh Gardens is also surrounded by established and popular primary, secondary and tertiary educational institutions. Renowned primary schools within 1 km of the site include Anglo-Chinese School (Junior) and St. Margaret’s Primary School.

The site could potentially be redeveloped into a 323,528 sqft residential development of about 400 apartment units with an estimated average size of about 740 sqft. Being located within the Central Area, the revised URA planning guideline on the minimum average unit size of 85 sqm effective 17 January 2019 does not apply to the site.

The owners have a Reserve Price of $480 million, reflecting a unit land rate, inclusive of an estimated State land premium, of $1,695 per sqft per plot ratio (psf/pr), or $1,541 psf/pr after factoring in the 10 per cent bonus gross floor area (GFA). No development charge is payable for the site, even for the additional 10% bonus GFA.

Cavenagh Gardens will be marketed through a public tender which closes on Thursday, 31 January 2019 at 3 p.m.

Cavenagh Gardens was first launched for collective sale in May 2018 and the tender closed on June 27 without finding a successful buyer. A few days later, the Government announced a fresh round of residential market cooling measures, increasing the rates of the Additional Buyer’s Stamp Duty (“ABSD”) and reducing the mortgage loan-to-value limits across the board.

In addition, for residential land purchases, there would also be a non-remissible ABSD of 5 per cent. The property cooling measures took the market by surprise and the en bloc sales market collapsed soon after. The Government’s property cooling measures caused the en bloc sales market to collapse. The en bloc sales market collapse have been amplified by developers being less active in the collective sale market, while new homes sales at some recent launches have moderated.

The introduction of the fresh property cooling actions a year into the market recovery, after four years of decline, was aimed at calming the euphoria in the private residential sector. Home prices which had risen were tapered in the last quarter. The price increase was largely driven by a brighter economic outlook, pent-up housing demand and a more positive market sentiment.

The Minister for National Development said in early October last year that it was premature to say if the property cooling actions introduced on July 5 achieved its intended objectives.

The Minister, Mr Lawrence Wong, said:

“The property cooling measures implemented on 6 July 2018 are intended to moderate the residential property market cycle and keep price increases in line with economic fundamentals. Loan-to-Value (LTV) limits were tightened across all housing loans, including those taken by first-time buyers, as the price increases prior to the measures were broad-based across the market, reflecting demand from all types of buyers. However, we maintained Additional Buyer’s Stamp Duty (ABSD) rates for Singapore Citizens and Permanent Residents buying their first residential property.

As the measures were only introduced recently, it is premature to conclude whether they have been effective. Nevertheless, there are early signs that the measures may have kept the pace of price increase in check. Based on URA’s latest flash estimate of the Property Price Index, prices increased by 0.5% in 3Q2018, compared to 3.9% and 3.4% in 1Q and 2Q2018 respectively.

The Government will continue to monitor trends in the property market, and adjust our policies as necessary, to maintain a stable and sustainable property market.”

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