Lee Foundation-linked company sells shophouses

A Lee Foundation-linked company has sold a row of four freehold conservation shophouses along Outram Road for S$23.8 million to construction and property group Chiu Teng.

In another deal, a pair of adjoining shophouses at 277 and 279 New Bridge Road – where Korean BBQ and steamboat restaurant Manbok operates on the ground floor – was sold for S$14.5 million.

The freehold, four-storey shophouses, which are on a single land lot and have a total gross floor area (GFA) of around 7,450 sq ft, are being sold by ACT Holdings.

The buyer is understood to be a company linked to Singapore-based SilkRoad Property Partners, a property investment management company set up in 2012 by the former AEW Asia senior management team led by Peter Wittendorp.

Along Boat Quay, two next-door shophouses are changing hands in two separate deals.

No 54 Boat Quay is being sold for S$12.9 million by a company that is part of the Chua Chuan Leong Group, which among other things, owns Goldbell Tower along Scotts Road; the buyer is a company indirectly owned by Tai Tak Estates Sdn Bhd. No 53 Boat Quay has fetched S$13 million; it is being sold by two individuals to a Singapore-incorporated company named Heritage Circle. Both the properties are on sites with 999-year leasehold tenure and span three levels and an attic.

In Outram Road, Chiu Teng, which is picking up four shophouses at Nos 265, 267, 269 and 271, is expected to do additions and alterations work on the four-storey property, which is zoned residential with commercial use at the first storey.

The property is in the Tiong Bahru Secondary Settlement conservation area.

Chiu Teng’s price reflects S$1,482 per square foot based on the existing GFA of 16,061 sq ft. There is potential to increase this space by 2,314 sq ft to reach the maximum 18,375 sq ft allowed, based on the 3.0 plot ratio indicated for the 6,125 sq ft site in the Urban Redevelopment Authority’d (URA) Master Plan 2014.

The properties are understood to be more than 50 years old although they have been spruced up. Knight Frank brokered the sale through an expression of interest exercise that closed in early October. Its executive director for investment and capital markets, Mary Sai, said that Chiu Teng’s price reflects about 3 per cent gross yield based on the asset’s current rental income. All four retail units at street level as well as 10 of the 12 apartments above have been leased.

Ms Sai says: “Most of the leases run out in the the first and second quarters of next year which would make it timely for the buyer to embark on a major refurbishment of the asset.

The residential component may be reconfigured into smaller units and installing a lift would improve their rental demand.

“In addition, the property’s proximity to the popular Tiong Bahru area means it is in a very leasable location for either rental apartments or potentially serviced apartments.”

The ground-floor units can also be spruced up and leased to upmarket eateries.

Pulau Properties, which is selling the shophouses, is owned by the Lee Foundation and members of the Lee family.

In September, a fully-owned unit of Lee Rubber, which is also controlled by the Lee family, sold a standalone block of 11 adjoining shophouses in Lavender Street for nearly S$55.56 million. In that deal, the Lee Rubber subsidiary carved out a 99-year leasehold interest for the buyer, Broadway Textile.

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