commercial Investment

A CONSORTIUM led by mainboard-listed Lian Beng Group is set to buy the BreadTalk IHQ Building in Tai Seng in an S$118 million sale-and-leaseback deal.

BreadTalk Group, which was privatised by its founders last year, will rent the property as an anchor tenant for an initial 10 years.

It can then either extend its lease by another five years at market rate or buy back the building at a mutually agreed price.

Lian Beng, which holds a 75 per cent stake in the consortium, plans to fund its share of the purchase through bank borrowings and/or internal resources.

Meanwhile, another 5 per cent of the joint venture is held by 32RE Investments, tied to an associate of Lian Beng spin-off SLB Development.

The third partner, with a 20 per cent interest, is Apricot Capital, a private investment firm by the Super Group’s Teos.

Lian Beng’s board called the deal in line with its core property investment business, while chairman and managing director Ong Pang Aik said it “should enable us to yield positive rental returns from this investment in addition to potential capital appreciation”.

Mr Ong added: “The acquisition will extend our investment footprint in industrial real estate and help to diversify our property portfolio.”

The 10-storey BreadTalk IHQ Building – which mainly houses BreadTalk’s international headquarters, eateries, warehouses and kitchens – has a gross floor area of 248,902 sq ft. The land tenure runs out in 2040, but can be extended for 30 years.

The transaction, which requires approval from government landlord JTC, is slated to go through on April 1 or eight weeks from the put-and-call option being exercised, whichever is later, or at any other date that the parties agree on.

Lian Beng independent director Tan Khee Giap is also a BreadTalk director, the board said. Otherwise, no other directors or controlling shareholders have interests in the deal.

The group last posted net profit of S$17.6 million for its first half-year to Nov 30, 2020, down 5.2 per cent year on year, while revenue fell by 36.6 per cent to S$197.5 million.

Lian Beng shares closed at S$0.435 on Friday, down by half a Singapore cent or 1.14 per cent, before the latest announcement.

By Annabeth Leow, The Business Times/ 16-Jan-21

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Retail Rental

DEPARTMENT store operator BHG Singapore is taking over the first two floors of the space formerly occupied by Robinsons Singapore at Raffles City Shopping Centre, The Business Times has learnt.

Robinsons used to occupy three floors spanning roughly 85,000 square feet (sq ft) at Raffles City before it closed the store last weekend, exiting the retail scene for good after years of losses.

BHG’s new store at Raffles City will open its doors to the public by the end of this month. It is said to be a new concept store called “ONE ASSEMBLY” and is a collaboration between BHG and Raffles City.

In a joint statement, BHG and Raffles City said that the concept store will offer “the ultimate selection of beauty, fashion, home and living, and experiential offerings”. The store will also have two “experiential spa cabins” for shoppers to relax in.

DEPARTMENT store operator BHG Singapore is taking over the first two floors of the space formerly occupied by Robinsons Singapore at Raffles City Shopping Centre, The Business Times has learnt.

Robinsons used to occupy three floors spanning roughly 85,000 square feet (sq ft) at Raffles City before it closed the store last weekend, exiting the retail scene for good after years of losses.

BHG’s new store at Raffles City will open its doors to the public by the end of this month. It is said to be a new concept store called “ONE ASSEMBLY” and is a collaboration between BHG and Raffles City.

In a joint statement, BHG and Raffles City said that the concept store will offer “the ultimate selection of beauty, fashion, home and living, and experiential offerings”. The store will also have two “experiential spa cabins” for shoppers to relax in.

Said Chris Chong, retail managing director at CapitaLand Singapore: “We are delighted to collaborate with BHG Singapore and incubate interesting concepts and experiences for the shoppers of Raffles City. By joining hands to present ONE ASSEMBLY, we set out to enhance Raffles City’s shopping experience with a plethora of offerings that are thoughtfully curated for this collaborative space, delighting shoppers each time they visit us.”

On Thursday, Courts Singapore announced that it is opening a new flagship store at The Heeren in place of Robinsons, taking up all 186,000 sq ft of space over six floors vacated by the latter.

By Lynette Tan, The Business Times, 15-jan-21

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Shophouse For Sale

SEVERAL shophouses located in Tanjong Pagar and Outram Park have been put on the market on Wednesday, amid mounting demand for the property type.

A three-storey conservation shophouse with attic at 91 Tanjong Pagar Road is up for sale via expression of interest with an indicative price of S$10.2 million, exclusive marketing agent JLL said.

This translates to S$2,615 per square foot (psf) based on an estimated gross floor area of 3,900 square feet (sq ft). The shophouse has a land area of 1,292 sq ft.

t is zoned for commercial use under the Urban Redevelopment Authority’s (URA) Master Plan 2019, which means foreigners are eligible to buy it with no additional buyer’s stamp duty and seller’s stamp duty payable.

LL capital markets director Ong Zhen Hao said the shophouse is fully tenanted and has attributes including regular, column-free floor plates, generous ceiling heights and windows that let in natural light.

Nestled in the Central Business District, the property is a four-minute walk from Tanjong Pagar MRT station and the upcoming Maxwell MRT station. It is also near Michelin-lauded restaurants such as Tippling Club, Gattopardo and The Blue Ginger.

Mr Ong said Tanjong Pagar has traditionally been an appealing locale to astute investors, who are mainly drawn to its growing buzz.

“It has established itself as the go-to location for bridal boutiques and refreshing food and beverage (F&B) concepts. At the heart of all this is 91 Tanjong Pagar Road, which is strategically positioned to benefit from the high footfall,” he added.

Besides that property, a pair of freehold three-storey commercial conservation shophouses at 13 and 15 Teo Hong Road is up for sale with a S$33 million guide price, sole marketing agent CBRE said on Wednesday.

This translates to S$2,980 psf, based on an estimated floor area of 11,070 sq ft after addition and alterations (A&A) work.

The shophouses face Outram Park MRT and are in the Bukit Pasoh Conservation Area. Zoned for commercial use under the URA Master Plan 2019, they occupy a land area of 3,476 sq ft and have an 11.6 m frontage along Teo Hong Road.

CBRE said that in-principle approval from the authorities to conduct A&A work on the shophouses has been obtained. These works include the construction of an open terrace on the second floor and an attic above the third level.

The shophouses have a regular and column-free layout and a ceiling height of more than 4 m on the ground floor, which floods the place with natural light.

CBRE Singapore senior director of capital markets Clemence Lee said the shophouses will be sold with vacant possession. The buyer will be able to immediately carry out A&A works to tailor the shophouses according to needs.

The shophouses also come with the flexibility of having multiple potential uses such as F&B, retail, office, serviced apartments or hotel.

“We are optimistic that the subject property will appeal to a wide pool of buyers such as boutique real estate funds, family offices and high-net-worth individuals and corporates seeking to capitalise on the vibrant yet understated F&B and lifestyle scene in the Bukit Pasoh / Keong Saik area,” Mr Lee said.

“We are optimistic that the subject property will appeal to a wide pool of buyers such as boutique real estate funds, family offices and high-net-worth individuals and corporates who are seeking to capitalise on the vibrant yet understated F&B and lifestyle scene in the Bukit Pasoh / Keong Saik area,” Mr Lee said.

Back in May 2018, the family office of Indonesian tycoon Prajogo Pangestu picked up the Teo Hong Road adjoining freehold shophouses for nearly S$22 million. One of them was understood to have been sold by Lim Chun Shuang, son of Lim Hock San, president and chief executive of United Industrial Corporation.

The expression-of-interest exercise for 13 and 15 Teo Hong Road closes at 3pm on Feb 9; that for 91 Tanjong Pagar Road closes at 3pm on Feb 25.

The bustling shophouse property segment has been attracting high-net-worth individuals and families from here and abroad, in addition to property investment groups. The latest deals include three adjoining conservation shophouses at 8, 9 and 10 Craig Road, which went for S$29.28 million.

Last November, a shophouse at 6 Bukit Pasoh Road was marketed with a guide price of S$10.5 million, which translated to about S$3,750 psf on the total floor area, sole marketing agent PropNex Realty said at the time.

By Vivienne Tay. The Business Times/ 14-Jan-21

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shophouse for sale

THE buzz in the Singapore shophouse market continues, with the sector attracting high-net-worth individuals (HNWIs) and families here and from abroad, in addition to property investment groups.

The latest deals include three adjoining conservation shophouses at 8, 9 and 10 Craig Road which went for S$29.28 million. Singapore-based property investment group 8M Real Estate is buying the three-storey shophouses from Hong Kong-based Harilela Group, founded by businessman and philanthropist Hari Harilela.

The shophouses are on three separate land lots, with balance lease terms of about 67 years. The ground floor is fully leased to three restaurants. On the upper levels, four of the six office units are leased.

8MRE is expected to find tenants for the remaining two units and do a minor renovation.

Savills Singapore brokered the deal via an expression of interest exercise that closed in October, drawing a handful of offers from private-equity funds, HNWIs and families from Singapore and overseas – mainly China and India, said Savills Singapore director of investment sales Yap Hui Yee.

Savills also acted for Breadtalk Group in the S$17.2 million private-treaty sale of a two-storey freehold corner shophouse at 22/22A Lorong Mambong in Holland Village with Harry’s Bar as the ground-floor tenant. The upper level is leased to F45 gym. The gross yield on the transacted price is about 2.5 per cent.

Ms Yap declined to comment on the identity of the buyer, but The Business Times (BT) understands that it is an entity owned by Singaporean Cheong Sim Lam; Cushman & Wakefield acted for him.

Both properties were transacted last month.

Also changing hands is 198 South Bridge Road, which went for S$27 million. Standing prominently at the junction of Upper Cross Street and South Bridge Road, this property is being sold by an affiliate of Clifton Partners, a homegrown property investment group.

Another affiliate of Clifton also sold 89 Amoy Street for S$29.8 million in November. Both shophouses have three storeys and an attic, are on 999-year leasehold sites, and were picked up by mainland China parties. BT understands that the buyer of

89 Amoy Street is a Singapore-incorporated company owned by a Chinese citizen from Xiamen City, Fujian Province. Xu Haika, a Vanuatu citizen, is buying the South Bridge Road property.

Savills’s analysis of URA Realis caveats data downloaded on Jan 6 shows that nearly S$862 million worth of shophouse deals transacted in 2020 – not a bad showing for the pandemic-struck year.

The quarterly breakdown was S$152 million in the first quarter, S$117 million in Q2, S$179.9 million in Q3, and S$413 million in Q4.

With the strong recovery in the second half of the year, the full-year figure was just 6 per cent shy of the S$916 million total reached in 2019.

Said Ms Yap: “In the the first half of 2020, during the ‘circuit breaker’ partial lockdown, we saw some shophouse owners withdrawing their properties from the market, which shows the resilience of sellers. Since then, they have started exploring and putting their properties for sale at the right price.”

Simon Monteiro of List Sotheby’s International Realty said: “The shophouse market is heating up again as more family offices are set up here by overseas HNWIs.”

He brokered the sale of 48 Tras Street for S$9.85 million and acted for the seller in the S$14.85 million sale of 56/56A Serangoon Garden Way. Both deals were in Q4 2020.

Other deals in Q4 2020 included 77 Amoy Street, which fetched S$29.8 million; 42, 44 and 46 Smith Street (S$28.8 million), 35 Kreta Ayer Road (S$11.3 million) and 44 and 46 Changi Road (S$11.6 million). A pair of adjoining shophouses in Upper Dickson Road in Little India changed hands at S$3.6 million each.

Ms Yap of Savills expects shophouses to remain an attractive segment of the property market due to their rarity and strong capital-value preservation, amid a strong liquidity and low interest rate environment.

“I envisage that these will continue to result in positive carry and drive deals in 2021,” she said.

By Kalpana Rashiwala, The Business Times/ 7-jan-21

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PROPERTY investment sales in Singapore are likely to rebound as vaccination programmes are rolled out next year, with business sentiment picking up and border restrictions gradually eased, CBRE said in a press statement on Monday.

Michael Tay, head of capital markets for Singapore at CBRE, noted that the Singapore investment market has been resilient and has demonstrated its ability to recover from crisis situations in the past. “This was apparent post global financial crisis when real estate investment sales volume improved by a strong 265.4 per cent in 2010,” he said.

While investors are likely to remain discerning at the start of next year, they will still be in search of investments that provide higher returns, spurred by the low interest rate environment and ample liquidity, Mr Tay said.

As an investment destination, Singapore fits this bill given its “proven ability to handle the pandemic, macroeconomic stability and political-neutral stance”, he added.

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PIL Building fails to get URA nod to tap CBD Incentive Scheme because of its site area

ATTEMPTS to sell two office towers – ABI Plaza in Tanjong Pagar and PIL Building in Cecil Street – have hit a snag.

In the case of ABI Plaza, a private fund managed by CapitaLand that was doing exclusive due diligence with a view to buying the 12-storey freehold block did not enter into a deal when the exclusivity period ended last Friday .

BT understands that the fund had sought an extension of the due diligence period but the building’s owner – listed MYP, which is controlled by the family of Indonesian tycoon Tahir – is not keen.

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DBS Group Research on Wednesday reiterated its positive stance on Singapore office real estate investment trusts (Reits), citing a potential upcycle in office demand, spurred by the expansion plans of Chinese tech giants.

In their report, analysts Rachel Tan and Derek Tan pointed to recent news that Tencent had picked Singapore as its Asia hub after setbacks in the United States and India, with other Chinese giants, including Alibaba and ByteDance, also reportedly making plans to expand in the Republic.

(more…)
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