Jalan Besar property sold for almost $10m below indicative price

SINGAPORE (EDGEPROP) – 2 Cavan Road, a 20,100 square feet Jalan Besar property, was bought by a unit of Kheng Leong Company for $38.71 million. When the Jalan Besar property was put up for sale in March, it had an indicative price of $47.4 million.

The buyer of the Jalan Besar property plans to turn it into apartments, with commercial units on the ground floor.

Jalan Besar property

Image credit: CBRE

2 Cavan, off Lavender Street, was launched for sale by public tender in March 2019 and was jointly marketed by CBRE and HRL Properties. The freehold redevelopment site currently accommodates a part-single-part-three-storey light industrial-cum-warehouse building which is understood to have been built in the 1950s.

Under the 2014 Master Plan, the Jalan Besar property is zoned “residential with commercial at the 1st storey” with a plot ratio of 3.0. The marketing agents said when the property was launched for sale that, as the current gross floor area of the buildings are under-utilised, the successful buyer can consider maximizing the gross floor area of 2 Cavan Road to approximately 60,301 square feet upon redevelopment.

Subject to relevant authorities’ approval, new extensions within the conservation guidelines of up to a six-storey building height are permitted, of which relevant development charges will be applicable.

The Jalan Besar property belongs to a single owner, so approval from strata titles board is not be required. Assuming the existing building at 2 Cavan Road is conserved and incorporated into the proposed redevelopment, the development charge for this site will be $18.9 million. After factoring in the development charge, the guide price for the site worked out to $1,100 per square foot per plot ratio.

Mr Low Choon Sin, Manager, Capital Markets, CBRE said when launching the property for sale: “We expect keen interest from mid-sized developers and contractors due to the palatable quantum as well as the potential to redevelop both sites into a boutique mixed-use development. Such mixed-use developments typically have a strong appeal to home buyers due to the freehold tenure in a city fringe location. The short walking distance to both Bendemeer and Lavender MRT stations are strong plus factors.”

Jalan Besar is a one-way road in Singapore, connecting Kallang and Rochor. The side of Jalan Besar between Lavender Street and Syed Alwi Road was once swamp land. Flying ducks, snipe, fish, mud lobsters and multi-coloured snakes thrived there. The area was slowly reclaimed by dumping refuse. In 1923, the New World Amusement Park located off Jalan Besar was opened by the enterprising sons of Ong Sam Leong (after whom nearby Sam Leong Road is named), Peng Hock and Boon Tat.

In recent years, the Lavender/Jalan Besar area has undergone a transformation into a vibrant lifestyle location. With high-rise residential and commercial developments sprouting up, the area in which the two freehold redevelopment sites are in provides a diverse range of entertainment, cultural and lifestyle attractions including hipster cafes and bars that attract high footfall and immediate catchment.

Prominent landmarks include the newly completed ARC 380, City Square Mall, Jalan Besar Sports Centre, City Square Residences and the upcoming Sturdee Residences. The subject property is also well-connected to the key precincts in Singapore, such as the CBD which is only a 10-minute drive or train ride away.

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