Homegrown investment property company 8M Real Estate has bagged a portfolio of nine conservation shophouses and a commercial building in District 1 near the Singapore River for a total of S$82.5 million.
The properties are in two clusters - one in Boat Quay/Circular Road and the other along New Bridge Road.
The properties are being sold 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 founding member of Boys' Town as well as the Singapore Chinese Chamber of Commerce and Industry.
For buyer 8M Real Estate, the acquisition will boost its portfolio to more than 40 conservation shophouses, all in Districts 1 and 2, worth about S$500 million.
In the latest deal, the nine shophouses the group is buying comprise 61 and 77 Boat Quay, 17, 45 and 46 Circular Road (all 999-year leasehold properties), and a corner block of four adjoining shophouses at 27, 29, 31 and 33 New Bridge Road on sites with remaining lease tenures of 15 to 19 years.
8M is also acquiring a freehold five-storey commercial building at 23 New Bridge Road.
Based on the S$45.5 million caveat lodged for the Boat Quay/Circular Road cluster, the blended price works out to about S$3,150 per square foot on gross floor area. Market watchers expected that the shophouses along Boat Quay, which fronts the Singapore River, would have fetched slightly higher prices than those on Circular Road, which is just behind Boat Quay.
Of the five shophouses in this cluster, only 61 Boat Quay is approved for F&B use on all three levels; the other four are cleared for F&B activites on the ground floor only.
Ashish Manchharam, managing director of 8M, said the group plans to eventually refurbish the 10 properties when tenants' leases come up for renewal.
He highlighted the redevelopment potential of the prominently located block of four shophouses at the corner of New Bridge Road and Carpenter Street.
Zoned for commercial use with 4.2 plot ratio, the four-storey shophouses are in a secondary conservation area. A six-storey extension can be built at the back, increasing the gross floor area by about 11,500 sq ft to 30,000 sq; the front facade has to be retained.
These four shophouses are nearly fully occupied and the tenants' leases run out at the end of this year, after which 8M may begin redevelopment.
The group intends to make an application to the authorities to top up the sites' leases to 99 years, subject to payment of a lease upgrading premium.
The two Boat Quay shophouses that 8M is buying will augment its collection of 999-year leasehold waterfront conservation shophouses to five. It already owns Nos 70, 71 and 72 on the same street.
"The efforts of Singapore River One to rejuvenate the Singapore River area including Boat Quay have helped with leasing activity of our three existing shophouses in Boat Quay," said Mr Manchharam.
Singapore River One is a private sector-led partnership of property owners and business operators which oversees the place management of the Singapore River precinct, comprising Boat Quay, Clarke Quay and Robertson Quay.
The 10 properties that 8M is buying make up the first phase of a portfolio 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 conservation shophouses at 35 and 56 Boat Quay, 11 Upper Circular Road, 482 Serangoon Road and a ground-floor shop unit at Tanjong Pagar Plaza. These are expected to come on the market in a few months.
Adapted from: The Business Times, 28 March 2018