Pearlbank to be sold at $750mn

This translates to $1,495 psf ppr including an estimated charge of $167.2 million to top up the lease to 99 years.

According to DBS Vickers, the residential building was built in the 1970s and it is within walking distance to Ouram MRT station. The residential building is up for sale for the third time.

The 82,379 sf site with plot ratio of 7.2X can house a potential GFA of 613,530 sf.

Based on $1495psf of land cost, DBS estimates breakeven cost to be around $2000-2050psf and selling price would likely have to be in the $2300-2400 psf, assuming a 10-15% development margin.

In its vicinity, units at the 99-year leasehold Dorsett Residences, which was launched for sale in mid-2010, was transacted between $1600 - $1950 psf in Aug/Sept 2010. Further down the road, recent transactions for both Spottiswoode 18 and Spottiswoode Residences, which are freehold, are transacted at around $2100 psf to $2,250 psf. Therefore, we think that the asking price is slightly optimistic based on recent residential transactions in the vicinity. Furthermore, the pool of potential bidders is also likely to be smaller due to the high price tag (in excess of $500m).