Lee Rubber sells Lavender shophouse block

Broadway Textile pays S$55.6m for the 11 shophouses on 99-year tenure; Outram shophouses also on the market

LEE Rubber Company is selling a stand-alone block of 11 adjoining conservation shophouses in Lavender Street for nearly S$55.56 million.

A fully-owned unit of Lee Rubber that owns the freehold interest in the property will carve out a 99-year leasehold interest for the buyer, Broadway Textile. Broadway is located at Textile Centre along Jalan Sultan nearby and is understood to have a part occupation/part investment strategy for its Lavender Street purchase. The company's management could not be reached for comment on Friday.

CBRE brokered the transaction. The price works out to nearly S$1,229 per square foot on the existing gross floor area (GFA) of 45,212 square feet.

Lee Rubber built the shophouses in the 1930s. It is believed that in the mid-1990s, it restored their facades and built a new four-storey rear extension.

Named Lavender Place, the shophouse block at 161 Lavender Street has triple frontage on Tyrwhitt Road, Lavender Street and Foch Road; there is also a backlane. The property is on 17,561 sq ft of land in the Jalan Besar Secondary Settlement conservation area.

Under the Urban Redevelopment Authority's (URA) Master Plan 2014, the site is zoned for commercial use with a 3.0 plot ratio (ratio of maximum GFA to land area); there is potential to add about 7,472 sq ft of GFA. Currently, the shophouses span two storeys (most units also have a mezzanine level), with a four-storey rear extension.

Under URA guidelines, the rear extension can go up to six storeys. The property comes with 10 covered carpark lots.

Ground-floor tenants include audio systems specialist Bowers & Wilkins. Nearly 80 per cent of Lavender Place's 32,861 sq ft net lettable area is leased.

When contacted, CBRE director of investment properties Sammi Lim said that the expression of interest exercise for Lavender Place closed on Sept 7, drawing strong interest from family offices, high net worth individuals and property funds. "It is rare to find a row of as many as 11 contiguous shophouses on an island site, for sale."

Based on market talk, Lee Rubber is also seeking to sell four adjoining Outram Road shophouses - also on 99-year leasehold tenure.

The expression of interest exercise for that property, believed to have been conducted by Knight Frank, also closed last month. The four-storey shophouses are zoned residential, with commercial use at first storey; the plot ratio is 3.0.

In the industrial property segment, Asia Pulp & Paper Company (APP) is in the early stage of selling 118 Pioneer Road, say sources. It has granted an option to purchase the property at S$26.03 million to Radha Exports, which runs the ABC Bargain Centre and ValuDollar chain of stores, selling fast moving consumer products at affordable prices.

Colliers International is brokering the sale via private treaty. Built in the late 1990s, the three-storey detached factory is on a nearly 170,000 sq ft site with remaining land tenure of 39 years.

The Business 2-zoned site's 2.5 plot ratio has already been fully tapped. It is next to the upcoming Tuas West Road Station - slated to open next year under an extension of the East-West Line.

Source: Business Times, 1 Oct 2016