Porcelain Hotel in early stage of being sold for about S$90m

RB Family Office seen as the intending buyer of the 12 shophouses along Mosque Street in Chinatown

Oct 16, 2021

IN ONE of the largest deals in the Singapore conservation shophouse market, Porcelain Hotel - comprising 12 contiguous four-storey shophouses along Mosque Street - is in the early stage of being transacted at about S$90 million.

The property, which bears 5 addresses - 46, 47, 48, 49 and 50 Mosque Street - is on two land lots with a total site area of 10,143 sq ft. Both lots have land tenures of 99 years starting August 2002, leaving balance lease terms of about 80 years.

The property is owned by entities controlled by Jason Lee Boon Leng of JForte Group of Companies, who is expected to reposition the asset through a refurbishment that may cost S$5 million to S$10 million; the intending buyer is seen as paying for the asset enhancement works up to a certain amount, with the vendor bearing the remainder, if any,

Signs point to the intending buyer being an entity of RB Family Office - controlled by Raj Kumar of Royal Holdings and his son, Kishin, the founder of Singapore-based property group RB Capital.

Among other things, the duo own 17 shophouses at Cuppage Terrace near Somerset MRT station.

Upon the completion of the sale of Porcelain Hotel, the vendor is expected to enter into a five-year sale and leaseback arrangement with the new owner; the rental payment is likely to reflect between 3.5 per cent and 4 per cent gross yield on the total of the purchase price and refurbishment cost.

A S$90 million purchase price works out to S$652,000 per key for the 138-room hotel. It also reflects S$2,326 psf on the existing estimated gross floor area of 38,686 sq ft.

Property consulting group CBRE has been marketing Porcelain Hotel.

Under the Urban Redevelopment Authority's Master Plan 2019, the site - which is part of the Kreta Ayer Conservation Area, within the Chinatown Historic District - is zoned for commercial use.

Market watchers say it would make sense to convert Porcelain Hotel's ground level, currently comprising hotel rooms and a spa, into F&B outlets. This may generate more buzz and contribute to the ongoing rejuvenation in the Chinatown Historic District. Over at Club Street nearby, Worldwide Hotels Group is developing a hotel with 900 rooms, as well as restaurant and shop spaces.

Mosque Street is also near China Square and the Central Business District.

Porcelain Hotel was put on the market for sale in February 2020 with a guide price of S$115 million.

Near the other end of Mosque Street, close to the junction of South Bridge Road and Upper Cross Street, two adjoining 999-year leasehold shophouses at 202 and 204 South Bridge Road were transacted in August at S$35 million, according to URA Realis data.

Observers note that a S$90 million price for the property will surpass the S$82.5 million sale in 2018 of a portfolio of nine conservation shophouses and a commercial building in District 1 near the Singapore River by Lee Brothers (Wee Kee), held by the family of the late Lee Wee Nam, a well-known Teochew businessman, community leader and philanthropist who set up the Four Seas Bank. The buyer was Singapore-incorporated shophouse investment group 8M Real Estate.