Hotel off Keong Saik Road sold for S$31m; buzz over high of S$4000 psf set in Amoy Street

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THREE adjoining freehold shophouses along Teck Lim Road off Keong Saik Road are being sold for S$31 million.

The shophouses at 12, 14 and 16 Teck Lim Road span three levels and a mezzanine floor, and currently house the 42-room Chinatown Hotel. The property has not had a major refurbishment for nearly 25 years.

The price works out to about S$2,770 per square foot based on an estimated gross floor area (GFA) of 11,200 sq ft.

This is similar to the approximately S$2,800 psf on GFA achieved in the recent sale of Naumi Liora, a 79-room boutique hotel located in 10 adjoining freehold conserved shophouses in Keong Saik Road.
In the latest deal, at Teck Lim Road, the seller is a family that has owned the property for more than two decades and who operates the hotel. The buyer is Hilltop Capital, whose shareholders are Aw & Sons Capital and Aw Kim Cheng Realty.

The deal was brokered by Cushman & Wakefield.

The buyer is expected to undertake a major revamp of the property. The Aw family's property portfolio includes The Offshore at 11, 12 and 13 North Canal Road - an integration of old and new shophouses, The property is tenanted to restaurants, a gym and other operators. The family has also developed residential projects in the prime Nassim and Jervois areas.

The three shophouses at Teck Lim Road have a land area of 4,152 sq ft.

Other recent shophouse deals include sales at Amoy Street, South Bridge Road, Ann Siang Road and Pagoda Street.

At Amoy Street, an entity linked to homegrown property investment firm Clifton Partners picked up a shophouse for S$21 million. This works out to around S$2,900 psf on built-up area of 7,225 sq ft; the 999-year leasehold property has three floors and an attic.

A Clifton Partners-linked entity has also bought 198 South Bridge Road, at the junction with Upper Cross Street, for S$11.8 million from Weng Cheong Company, one of Singapore's oldest goldsmith and jewellery companies and which operates at the premises.

The 999-year leasehold property has about 5,200 sq ft of built-up area over three levels.

Meanwhile, Spanish tycoon Ricardo Peralta continues his shophouse buying spree, acquiring 11 Ann Siang Road for S$9.1 million. He bought the next-door property last year from a Clifton-related entity for S$10.8 million. Mr Peralta is also buying 39 Pagoda Street for S$12.2 million or S$3,697 psf on built-up area.

Meanwhile, there has been some buzz in the market over a price of about S$4,000 psf on built-up area - one of the highest for the Singapore shophouse market - being recorded for 52 Amoy Street.

Loyalle Chin of PropNex, who brokered the deal, explained that this is partly due to the relatively low absolute quantum of S$7.1 million for the 999-year property, which has a land area of just 952 sq ft and a built-up area of about 1,800 sq ft spanning two levels and an attic.

"The buyer was willing to pay a premium because he likes the tenant profile, the fact that the shophouse is fully leased to F&B outlets, which typically can shell out higher rents."

The entire ground floor is leased to Wanton, Seng's Noodle Bar while cocktail bar Native occupies the upper levels.

The gross yield works out to 2 to 2.5 per cent, according to Mr Chin.

Clemence Lee, associate director of capital markets, Singapore, at JLL, said that on the whole, prices for prime conservation shophouses in Districts 1 and 2 have remained resilient - mainly due to a lack of quality shophouse offerings available in these areas, while buying interest among the boutique real estate funds, family offices and high networth individuals remains high.

"As more of such properties are getting snapped up, we expect prices to continue appreciating further as fewer of such opportunities are available in the market," he added.

Source: Business Times, 12 Jul 2017