Redeveloping Liang Court may be a boon for CapitaLand as it could push yield by up to 4.7 percent or an implied land rate of $939 per sq ft (psf). 

The co-investment of CapitaLand in Liang Court could kick-start the redevelopment of the ageing shopping mall.

In fact, DBS Equity Research believes that redeveloping Liang Court may be a boon for CapitaLand as it could push yield by up to 4.7 percent or an implied land rate of $939 per sq ft (psf), reported Singapore Business Review.

“Given its prime location within the Central region, a better use could be to redevelop the property, given that it is on a land that is currently zoned for residential and commercial uses,” said the research firm.

CapitaLand could reap the benefits after the ownership of the integrated development is reduced to two like-minded entities.

“Assuming approvals for the redevelopment are obtained, we believe that a new mixed-use development could command a gross development value (GDV) of $3.0 billion, implying an attractive return of 29 percent above our projected costs,” it added.

Liang Court shopping mall was jointly acquired by CapitaLand and CDL Hospitality Trusts’ Sponsor for $400 million from PGIM Real Estate Asia Retail Fund.

The development consists of the Novotel Clarke Quay hotel that is owned by CDL Hospitality Trusts, and Somerset Liang Court Singapore serviced residence that is owned by Ascott Residence Trust, which in turn is majority owned by CapitaLand.

Source: 8 Jul 2019, CommercialGuru