Sim Lim Square seeks $1.1b in en bloc sale but anchor-owner ensure if buyer can be found

0
943

Sim Lim Square is seeking $1.1 billion in en bloc collective sale after the conclusion of a successful second extraordinary general meeting (EGM) on 12 March. The popular six-storey strata-titled retail mall has 492 individual units with a total strata floor area of approximately 236,881 sq ft, excluding common areas such as the basement car park and common corridor.

The currently approved total gross floor area is 391,002 sq ft. The owners of Sim Lim Square are reportedly asking for a whopping $1.1 billion. Almost 60 percent by share value of owners attended the EGM and of those, about 87 percent voted in favour of the apportionment method and 97 percent for the en bloc collective sale agreement of Sim Lim Square.

Enbloc Sales – 8 potential conflicts to consider

SLP International Property Consultants (SLP) who has been appointed as the marketing agents, are working with and advising the collective sale committee. Over the past 6 months, SLP has met the owners of Sim Lim Square to explain to them the important issues on the en bloc process.

The attempt for en bloc by the owners of Sim Lim Square makes it Singapore’s first full commercial prime city centre collective sale. The 31-year-old building which was completed in 1987 is located at the junction of Rochor Canal Road and Bencoolen Street.

Salleh Marican, the founding Chairman and CEO of Second Chance Properties Ltd, which owns 12 commercial units in Sim Lim Square, said he was not confident if they can get 80 percent of the signatures to move to the next stage of the en bloc. Mr Salleh who unsuccessfully tried to run in the 2017 Presidential Election also said, “whether we can get a buyer at $1.1 billion, I am not so sure.”

If the en bloc goes through, the owners of the largest units in Sim Lim Square could get as much as $60 million, while the smaller ones may get $1 million. Mr Salleh himself stands to gain $30 million from a successful collective sale.

With asking price of S$2.5b Mandarin Gardens set to break record for largest en bloc sale

Sim Lim Square is notorious for bad service and dubious sales tactics, but it is also known as the go-to place in Singapore for electronic gadgets.

As early as in 2008, Sim Lim Square shops were busted by the police for selling counterfeit copies of Microsoft Windows.

In April 2013, after the management of Sim Lim Square put up lists of recalcitrant shops as a warning to shoppers, some of these stores resorted to shrinking or removing their names from their signboards. Others even changed their name or got culprits to rip off the list.

The dishonest sales practices of some of the shops in Sim Lim Square was underlined by the Jover Chew saga. Chew set up the electronics shop, Mobile Air, in Sim Lim Square with the sole aim of deceiving his customers with inflated warranty prices. The electronics shop closed following outrage when a video circulated online of a Vietnamese tourist, on his knees begging for a refund from Chew. The Vietnamese had paid $950 for an iPhone 6, but was told he had to add $1,500 in warranty fees.

Chew was sentenced to 33 months’ jail and fined $2,000 in 2015 for his “audacious” scheme of cheating unsuspecting victims while seeking to dodge civil and criminal sanctions.

The impact on the mall’s reputation over customer scams, highlighted by the Jover Chew saga, was so serious that in late 2014 the management of Sim Lim Square appealed to the authorities to “take a tough stand against the recalcitrant retailers”.

Now, scam victims may seek redress through the Sim Lim Square management (who certifies honest retailers through its Star Retailer programme), CASE (Consumer Association of Singapore) or the Small Claims Court.

But not all the shops in Sim Lim Square are infamous. One reviewer in Tripadvisor says, “the trap for most tourists is that they shop at the first two floors because of time restraints. This is where the stores are at the most expensive…(so) start from the top level and look into the back areas because there are some places where you can find some of the oddest and more practical items…As you go down, the market tends to move from the “geek” level to the common user and the prices slowly rise which is a real shame…”

But such honest reviews have failed to lift the fortunes of the retailers in Sim Lim Square. The mall’s bad reputation has affected sales in recent years. As the shops are individually owned, the management is unable to eliminate the errant retailers.

More recently, Sim Lim Square was flagged by the Coalition Against Piracy for selling set-top boxes which enabled them to stream copyrighted programmes such as Game of Thrones or the latest Korean dramas without having to pay for the content. Savvy salesmen at electronics mall Sim Lim Square expertly demonstrate how easy it is to set up and access programmes on the set-top boxes.

The Government does not consider the devices illegal as users can view them legally in websites, such as YouTube and members of public who are interested in buying them, can easily purchase the sets from places such as Sim Lim Square at the price of around $100 and above.

Despite such negative press, Sim Lim Square has maintained its niche as a retail electronics hub, especially with the closure of Funan Digitalife Mall. If the Sim Lim Square en bloc sale comes to a successful closure, Singapore would have lost another retail space dedicated to all things electronic and technocentric.

If that happens, the best bet for IT retailers still housed in Sim Lim Square would be to move into shopping malls which have established a reputation in recent years as the place to be to fulfill ones geeky impulses or electronic needs. Peninsula Shopping Centre, Liang Court- Audio City and Suntec City are some of these malls which have entrenched themselves as futuristic technocentres.