FEASIBILITY ANALYSIS OF RAFFLES PLACE / CHANGE ALLEY SITE

Abstract

Over the years, the Urban Redevelopment Authority has, through the Sales of Sites Programme, regulated the supply of land for specific purposes, in particular, the redevelopment of central area. Substantial land released in 1980/81 were snapped up and redeveloped. In the following three years, the property market was plagued with an over-supply situation, following an economic downturn. Rental and capital values were significantly brought down. Some projects suffered losses while others were either shelved or abandoned. Such financial losses could have been avoided if proper feasibility analyses were carried out prior to making the investment decisions. This study attempts to evaluate the feasibility of the proposed office cum shopping complex on the Raffles Place/Change Alley site which the URA just tendered out in March this year. The results of the analysis indicated that, though there will be more supply of offices than would be demanded in the market by 1993, the development would still be feasible and financially viable. In fact, the development will be highly profitable with a reasonably low level of risks.