Boon Lay Raja Restaurant is closing down, owners to sell shop for $15m

[princess_morbucks]

SINGAPORE - The sun is setting on a popular Chinese restaurant in the west, with its owners looking to retire and sell the shop space for at least $15 million.

They have appointed Savills Singapore to sell by tender the shop, which occupies 11,248 square feet of space and is about 200 metres from Jurong East MRT station.

The space has a remaining lease of 69 years taken from the Housing and Development Board (HDB).

Savills said the owners have set a reserve price of $15 million, or $1,334 per square foot, on the sale.
- See more at: http://www.straitstimes.com/news/business/property/story/boon-lay-raja-restaurant-closing-down-owners-sell-shop-15m-20141008#sthash.mNmeL5p7.dpuf

[Arcachon]

MacDonald

McDonald's Real Estate
You've got to admit -- a lot of people think those fries are darn good. But to understand what made McDonald's Corp. so successful, you have to look at more than the food or Dick and Mac's Speedee System or even to Ray Kroc's dedication and savvy. Kroc himself attributed much of the company's success to a man named Harry Sonneborn [source: Love]. Sonneborn worked for McDonald's for a mere 10 years, but his real estate policies sealed the fate for the immensely successful company.
Let's back up a few years to when Kroc and the McDonald brothers were still working together. For some time after his hire, Kroc was struggling to make the business profitable. He wasn't bringing in enough revenue from his franchised restaurants. Part of his trouble was in getting the funds to pay for the land and the building for the restaurant. In order to maintain control over operations, Kroc needed to franchise one store at a time, rather than a whole slew of stores over a particular geographic zone, which is what other food chains did [source: Love]. Although other chains could attract big investors, the franchisees Kroc attracted didn't have the funds to pay for the land and the building.
That all changed in 1956 when he hired Sonneborn, who convinced him that the real money was in real estate. Sonneborn's idea was to have the McDonald's company lease a plot of land and the building for each restaurant. The company would then sublease to the franchisee who would run the restaurant. Sonneborn further developed the plan to eventually take out mortgages to own both the building and the land. [source: Love]. Kroc soon established the Franchise Realty Corp. to find willing landowners.
At first, McDonald's charged franchisees markups of 20 percent of lease costs, but it eventually increased this to 40 percent. Franchisees were responsible for insurance and taxes, ensuring a steady profit for the company as long as the restaurant stayed in business.
But that's not all: The rent due to McDonald's could be even more if the restaurant was doing well. The franchisee had to pay either the stipulated lease markup or 5 percent of the sales -- whichever was higher. Kroc and Sonneborn also requested up-front security deposits from the franchisees. Unbeknownst to the franchisee, this capital would fund the opening of more restaurants. Overall, this created a symbiotic relationship between the franchisee and the company -- McDonald's Corp. had a vested interest in the ongoing success of its individual restaurants [source: Love].

http://money.howstuffworks.com/mcdonalds2.htm

[Warren49]

The location is tailor-made not for Mcdonalds, but for Jumbo, Paradise Seafood and Hai Di Lao etc. V few other restaurant group can absorb the space. The food needs to be pretty niche, considering the fierce competition in the surrounding malls.

[reporter2]

http://www.businesstimes.com.sg/real-estate/heartland-restaurant-space-in-jurong-for-sale

Heartland restaurant space in Jurong for sale

The space enjoys high traffic from Jurong Gateway and Jurong Lake, and keen interest is expected in this tender

9 Oct


A PRIME heartland restaurant space has been put up for sale by tender, and its vendors are looking at a reserve price of S$15 million, or S$1,334 per sq ft (psf).

Located at 135 Jurong Gateway Road, the property is just 200 m from Jurong East MRT station. It currently houses Boon Lay Raja Restaurant, a 60-table Chinese restaurant with a strata area of 11,248 sq ft and a remaining lease of 69 years from its lessor, HDB.

A change of use to other trades may be allowed, subject to HDB's approval, said Savills Singapore, the exclusive marketing agent

Derrick Tan, the associate director of investment sales at the real-estate services provider, said: "The vendors have been operating Boon Lay Raja Restaurant, a popular family restaurant, for more than 20 years. They would have preferred to continue operating this profitable business if not for their impending retirement."

He added that the property may interest restaurateurs who are facing escalating rentals and nursing dreams of running their own premises.

The property enjoys high footfall from an upcoming pedestrian mall linking the Jurong Gateway and Jurong Lake areas, as well as from JCube, the Jurong Regional Library and CPF Building.

The surrounding housing and industrial estates, International Business Park and upcoming residential, retail, office, hospitality and medical developments in Jurong Gateway also make for a large catchment of potential customers, Savills added.

"Prime HDB restaurant space is a rarity, especially in the Jurong Gateway precinct.

"This area is slated for further growth with the makeover of the Jurong Lake District; it is also a possible site of the new Singapore-Kuala Lumpur High-Speed Rail Terminus. Being well-located and rare, the space is expected to attract keen interest and immense competition from both end-users and investors," Mr Tan said.

The tender closes at 3pm on Nov 6, 2014.