8M buys shophouses, building for $82.5m
Local investment property company 8M Real Estate has bagged nine conservation shophouses and a commercial building in District 1 near the Singapore River for a total of $82.5 million.
The properties are in two clusters - one in Boat Quay/Circular Road and the other in New Bridge Road.
They 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 who set up the Four Seas Bank that 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.
JLL handled the sale through a tender exercise that closed on Feb 5.
"We received a lot of bids - from boutique property funds, family offices, high-net-worth individuals both Singaporeans and foreigners, along with a variety of local companies," said Mr Clemence Lee, JLL's associate director of capital markets.
Some parties bid for individual properties, some for an entire cluster and others for the whole portfolio, he added.
The acquisition will boost 8M Real Estate's portfolio to more than 40 conservation shophouses, all in Districts 1 and 2, worth about $500 million. 8M is also acquiring a Freehold five-storey commercial building at 23, New Bridge Road.
JLL and 8M would not give details of the price paid for each property.
However, based on the $45.5 million caveat lodged for the Boat Quay/Circular Road cluster, the blended price works out to about $3,150 per sq ft on gross floor area.
Market watchers expected that the shophouses along Boat Quay would have fetched slightly higher prices than those in Circular Road, which is just behind Boat Quay.
8M managing director Ashish Manchharam said the group plans to eventually refurbish the 10 properties when leases come up for renewal. He noted the redevelopment potential of the prominently located block of four shophouses at the corner of New Bridge Road and Carpenter Street.
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 ft, but 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.
The group intends to make an application to top up the site leases to 99 years, subject to payment of a lease-upgrading premium.
The two Boat Quay shophouses 8M is buying - numbers 61 and 77 - will bring its collection of 999-year leasehold waterfront conservation shophouses to five.
It already owns numbers 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 that oversees the place management of the Singapore River precinct, which includes Boat Quay, Clarke Quay and Robertson Quay.