OCBC is putting another property in its historical property portfolio up for sale. This time it is a pair of freehold conservation shophouses along Bukit Pasoh Road, near Keong Saik Road and a stone’s throw from Outram MRT Station.
The guide price for 11 and 13 Bukit Pasoh Road is in the region of S$20 million, which works out to about S$2,350 per square foot based on the gross floor area (GFA) of 8,503 sq ft.
The shophouses have three storeys and a mezzanine level.
OCBC has owned the two properties since 1935 and the last major refurbishment on the asset was done in 2012. “From time to time we review our property holdings for opportunities to unlock value. If we receive a good offer for any of our properties, we will consider selling it,” said OCBC’s spokeswoman when contacted by The Business Times. These historical properties are held by the bank’s property arm and are not mortgagee sales, she added.
The two adjacent Bukit Pasoh Road shophouses were not part of the portfolio of 38 shophouses and strata shop units islandwide that the bank put up for sale in April last year, some of which it has succeeded in selling.
JLL has been appointed the exclusive agent to market the sale of 11 and 13 Bukit Pasoh Road through a tender that will close on Aug 2.
The two shophouses have a combined land area of 2,926 sq ft zoned for commercial use within the Chinatown Historic District (Bukit Pasoh) Conservation Area.
The property is fully leased to six tenants – a spa and an aesthetics clinic (both at street level), a dance studio and an office tenant on the second level and two office tenants on level three, which is linked to the mezzanine floor.
Based on the existing rental income from the property, a price of S$20 million reflects a gross yield of nearly 2 per cent.
Clemence Lee, manager, capital markets at JLL, said that investors looking to add value to the asset could do internal refurbishment works as well as improve the tenant mix. “The existing ground-floor space may be converted to an upscale restaurant . . .”
He expects strong interest from boutique property funds, family offices and high-net-worth individuals eyeing an asset class that is in limited supply and rich in historical value. As the property is on a site with full commercial zoning, foreigners are eligible to buy. Moreover, there is no additional buyer’s stamp duty or seller’s stamp duty on such properties.
Historical Land director Simon Monteiro commented that sales of shophouses along Bukit Pasoh Road are rare as these properties are mostly held by clans and associations.
Mr Lee of JLL highlighted that the Bukit Pasoh-Keong Saik location is a vibrant F&B and lifestyle destination. The area is home to fancy boutique hotels such as New Majestic Hotel, Naumi Liora and Hotel 1929 and trendy designer restaurants such as Restaurant Andre, OSO Ristorante, Restaurant Ember and Burnt Ends. There are also stylish cafes in the locale including Potato Head Folk, The Lokal, Humpback and Luxe Sydney, in addition to cocktail bars such as Gibson Cocktail Bar and The Library Bar. The Working Capitol, which offers collaborative working spaces, is also in the area.
Bukit Pasoh Road is also home to one of Singapore’s oldest millionaires’ clubs, Ee Hoe Hean Club.
As 11 and 13 Bukit Pasoh Road are within the Tanjong Pagar precinct, their new owner can expect to enjoy strong capital and rental upside from the spillover of commercial activities and the gradual transformation of the area in the mid to long term.
Mr Monteiro described the pricing for OCBC’s two shophouses as “fair and reasonable”. “The architectural facade of these properties is unique. The buyer can enhance the yield by changing the tenant mix to F&B on the ground floor.”
Other recent shophouse deals in the area include the sale of 15, 17, 19, 21 and 23 Tanjong Pagar Road for S$57.4 million or S$2,166 psf on GFA; the five shophouses are on land with about 77.5 years’ balance lease.