By Kalpana Rashiwala
source: The Business Times
SINGAPORE-BASED property investment company 8M Real Estate (BMRE) has picked up two conservation shophouse properties in the Duxton Hill / Craig Road area for a total of $826.4 million.
The District 2 properties on sites with balance leasehold tenures of close to 68 years each are being sold by entities linked to veteran property investor Stanley Quek.
8MREis paying $$15.75 million for 28 Duxton Hill, a two-storey shophouse on land area of 3,557 square feet (sq ft). The ground floor is leased to Greek restaurant Fotia, while the office tenant that used to occupy the second level recently left when its lease expired. 8MRE is on the lookout for a replacement tenant for the second level. Dr Quek bought the property in 2011 for $$10.6 million,
The standalone property (it does not abut another shophouse) has an outdoor refreshment area and is next toa carpark.
The second shophouse that 8MRE is acquiring is just a stone’s throw away, at 53 Craig Road. It is paying $10.65 million for the corner property with a land area of 1,496 sq ft.
The entire property – comprising three levels and an attic – is leased to Coda Payments. The rental income reflects 3.5 per cent gross yield on the price paid by 8MRE. Dr Quek bought this shophouse for $$10 million in 2014.
The sales of both properties were brokered by Krystal Khor of boutique property agency Mondania.
8MRE’s two latest acquisitions will take its portfolio to nearly 60 properties – all in Singapore and comprising predominantly conservation shophouses. The company’s founder and CEO is Ashish Manchharam.
Entities connected to Dr Quek are understood to have acquired a total of 21 shophouses between 2010 and 2016; nearly all of them are on sites with 99-year leasehold tenures. He has divested most of the shophouses, with all the sales done at above the respective acquisition prices.
Following the latest sales, Dr Quek, will be left with just two shophouses in Singapore, at 34 and 36 Tras Street, which he plans to keep as this asset is currently occupied by his Italian restaurant, Gattopardo. When contacted about his latest divestments, Dr Quek said: “Having invested in these shophouses for a while and with their balance land tenures below 70 years, it is time for me to sell them and look for other opportunities coming up, whether in Singapore or elsewhere.”
The doctor-turned-property developer and investor added: “Its time for a new group of investors to enjoy and nurture these properties for the future.
The conservation shophouse market is drawing new investors, both Singaporeans and foreigners, who appreciate heritage properties that cannot be replaced, Moreover, the pricing in terms of per square foot of usable space for shophouses is still below that of commercial spaces in modern buildings.”
Besides 28 Duxton Hill and 53 Craig Road, Dr Quek has also previously sold to 8MRE five adjoining shophouses at 15, 17, 19, 21 and 23 Tanjong Pagar Road; 18 Gemmill Lane; 71 Neil Road; and 10 Stanley Street.
The properties divested by Dr Quek to other parties in the past few years include three adjoining shophouses 33, 35 and 37 Tras Street; 50 and 40 and 41 Duxton Hill.
Separately, an expression of interest (EON that closed on Nov 3 for a portfolio of three shophouses in District 1, is understood to have received bids that have met the vendor’s total guide price of $31 million.
The properties, which may be purchased individually or as a portfolio, are: 151 Telok Ayer Street, 14 Stanley Street and 8 Smith Street. The vendor is a trust company.
When contacted by The Business Times, a spokesperson for Knight Frank, which conducted the EOI, declined to comment on the outcome as the bids are still being evaluated by the vendor.