Rare prime-area shophouse portfolio for sale

Nine conservation shophouses and a commercial building hit the market with total price of S$91.5m

Tue, Dec 05, 2017

Kalpana Rashiwala

A PORTFOLIO of nine conservation shophouses and a commercial building in District 1 near the Singapore River are being put up for sale by tender.

The total guide price of the 10 properties is S$91.6 million.

The properties are divided into two clusters - one in Boat Quay/Circular Road, and the other along New Bridge Road. Potential buyers may either bid for an entire cluster or individual properties.

The properties are being put on the market by Lee Brothers (Wee Kee), which is held by the family of the late Lee Wee Nam, a well-known Teochew businessman, community leader and and philanthropist who set up the Four Seas Bank, which was later sold to OCBC Bank. He was also a founder member of Boys' Town as well as the Singapore Chinese Chamber of Commerce and Industry.

The 10 properties make up the first phase of a portfolio being offered by the Lee family.

Lee Brothers (Wee Kee) and another entity linked to the family, Lee Hiok Kee Pte Ltd, together own another five properties - comprising shophouses in Boat Quay, Upper Circular Road and Serangoon Road and a ground-floor shop unit at Tanjong Pagar Plaza - worth about S$68.5 million; these are expected to come on the market in due course.

The entire clutch of 15 properties are worth a total of S$160 million; the family is selling them to restructure its portfolio, The Business Times understands.

JLL has been appointed as the exclusive marketing agent for the sale of the entire portfolio.

It will market the 10 properties under the first phase of this exercise through a tender exercise to be launched on Wednesday. The tender closes on Jan 24.

The two shophouses with waterfront views along Boat Quay are No 61 and No 77. No 61 is a three-storey property with a guide price of S$9 million or S$3,642 per square foot based on the gross floor area (GFA) of 2,471 sq ft; the asking price for No 77 is S$12.6 million (S$3,404 psf).

Along Circular Road, just behind Boat Quay, is No 17, with an S$8 million asking price (S$3,343 psf).

No 45 and No 46, a pair of three-storey shophouses, have a S$20.5 million (S$3,487 psf) price tag.

Only 61 Boat Quay is approved for F&B use on all three levels; the rest are cleared for F&B activities on the ground floor only.

All the properties in this cluster are on sites with 999-year leasehold tenure and are fully tenanted. Their respective guide prices reflect gross yields ranging from 2 to 2.5 per cent, said Clemence Lee, associate director of capital markets at JLL.

"Shophouses on Boat Quay and Circular Road represent the crème de la crème of all Singapore shophouse assets, given their prime District 1 location, vibrant F&B lifestyle scene and coveted 999-year tenure."

Given the current limited supply of quality 999-year/freehold shophouses available for sale in District 1, this cluster of properties provides investors with an "unparalleled aquisition opportunity" in this tightly-held segment, he said.

The New Bridge Road cluster comprises a block of four adjoining four-storey shophouses at the corner of New Bridge Road and Carpenter Street and a five-storey commercial building at 23 New Bridge Road.

Both properties are zoned for commercial use with a 4.2 plot ratio .

The commercial building, which is fully tenanted, is on a freehold site of 1,584 sq ft. Its guide price of S$18.5 million translates to S$2,806 psf on GFA. The building's GFA has already been maximised.

On the other hand, the four shophouses at 27-33 New Bridge Road, which are part of the Upper Circular Road Conservation Area, have redevelopment potential.

A six-storey extension can be built at the back, increasing the GFA by around 11,500 sq ft to 30,000 sq ft; the front facade has to be retained.

Currently, the four shophouses are on sites with between 151/2 and 191/2 years left on their leases.

Mr Lee said: "There is potential to top up the leases to a fresh 99-year tenure, subject to approval by the authorities - if the developer maximises the GFA (by building a back extension) and pays the lease upgrading premium to the state."

The shophouses are partly occupied. "The asset is ideal for an investor keen to develop an iconic flagship building in the CBD with a 70m double frontage. Potential uses for the property include office, coworking, F&B, medical, hotel and entertainment.

"Singapore has fewer than 7,000 conservation shophouses, making them prized real estate with unique architecture and rich heritage charm."