CDL, MCL Land marketing Piccadilly Galleria retail podium for sale at lower price of S$67.5m

[SINGAPORE] Piccadilly Grand’s retail podium is up for sale for S$67.5 million, at a lower price after an earlier expression of interest exercise closed in November 2024. 

The ground-floor retail podium, known as Piccadilly Galleria, is part of a 99-year leasehold integrated development developed by City Developments Ltd (CDL) and MCL Land. The project is expected to be completed in the fourth quarter of 2025. 

The 15-unit retail podium was first put up for sale in October 2024 for S$75 million, or S$3,724 psf. At the current guide price which is 10 per cent lower, this would work out to S$3,350 psf based on the retail podium’s net lettable area of 20,140 square feet (sq ft). 

In response to queries from The Business Times, CDL’s chief investment officer Gerald Yong said: “The divestment of Piccadilly Galleria is aligned with our strategic focus on capital recycling. As a brand-new retail podium that is part of a rare city fringe integrated development with direct connectivity to Farrer Park MRT station, the asset offers a compelling investment proposition.” 

CDL has set a target to divest at least S$600 million worth of assets in FY2025, chief executive officer Sherman Kwek had said during the group’s annual general meeting in April. 

This is to lower the group’s “very high” gearing which stood at 117 per cent as at December 2024. 

In an operational update this month, CDL said: “The key focus for FY 2025 is on capital recycling, with the group lining up significant divestments to reduce gearing and redeploy the capital. Aside from paying down debt, the sales proceeds can also be used to fund dividends, share buybacks and new acquisitions. Going forward, divestments will remain a key pillar of the group’s multifaceted strategy.” 

In 2024, CDL divested over S$600 million in assets including the Ransome’s Wharf residential site in London, the retail and office components of Hong Leong City Center in Suzhou, a freehold 8-storey industrial building Cideco Industrial Complex in Singapore, as well as various strata units at Citilink Warehouse Complex, Cititech Industrial Building, Fortune Centre and Sunshine Plaza in Singapore. 

Leasing efforts are underway for Piccadilly Galleria, with a tenant secured for the childcare centre unit, marketing agents Knight Frank Singapore and CBRE said on Tuesday (May 27). 

Melvin Chay, senior director of capital markets at Knight Frank, said: “The updated pricing makes Piccadilly Galleria even more compelling, particularly as demand returns to the retail strata market amidst improving sentiment and easing interest rates.” 

Clemence Lee, executive director of capital markets at CBRE, said: “During our initial marketing campaign, we received substantial interest from a diverse range of buyers, including boutique real estate funds, family offices, high-net-worth individuals, local companies, and owner-occupiers.” 

“Recent months have shown a notable increase in demand for suburban and city-fringe retail assets in Singapore, which are viewed as defensive investments with strong growth potential.” 

In September 2024, Sheng Siong bought eight strata units in freehold condominium Siglap V and a HDB shophouse unit in Toa Payoh from a DFI Retail Group unit for S$50.2 million. In the same month, the Seneca Square mall in Tanah Merah was sold for S$64 million to 8M Real Estate.  DFI Retail Group also sold Jelita Shopping Centre in Holland Road for S$91.7 million in November 2023. 

CDL and MCL bought the Piccadilly Grand site along Northumberland Road in 2021 for S$445.9 million or S$1,129 psf ppr. The project launched in May 2022 and sold 315 out its 407 condominium units – or 77 per cent of units – at an average selling price of S$2,150 per square foot (psf). 

The expression of interest exercise will close on July 22.