A PORTFOLIO of nine freehold shophouses and two 9,999-year leasehold strata shop units is up for sale to a single buyer.
The seller is The Bamboo Group, a six-year-old boutique property investment and development company specialising in repositioning shophouses.
With a total floor area of 31,774 square feet, the portfolio has an indicative price of S$77 million and is up for sale through an expression of interest (EOI) exercise being conducted by Cushman & Wakefield. The offer will close on May 21.
Included in the portfolio are five two-storey conservation shophouses along Tanjong Katong Road and three shophouses along South Buona Vista Road. The Tanjong Katong Road properties comprise No 362 (at the junction with Wilkinson Road) and four adjoining properties at No 332, 334, 336 and 338 (at the Branksome Road corner).
Along South Buona Vista Road, two adjoining properties, No 30 and No 32, are available along with No 38 a few doors away.
Under the Urban Redevelopment Authority's Master Plan 2014, all these eight shophouse properties are zoned "residential with commercial at first storey" and have a 3.0 plot ratio (ratio of maximum gross floor area to land area).
The ground-level space in the shophouses is either leased to or approved for use as food and beverage/retail outlets.
The upper level contains furnished boutique residential studio units with tenancies of six months or longer.
Cushman & Wakefield executive director for capital markets Shaun Poh said: "Both the Tanjong Katong Road and South Buona Vista Road assets are mixed-use and have unrealised plot ratio to tap, allowing buyers to consider various asset-enhancement options. Investors can also enjoy rental returns and renewal upside from potential F&B operators on the first storey and leasing the residential component above as boutique studios with provision of certain services to cater to residential tenants . . ."
Also part of the portfolio is a corner freehold two-storey shophouse at 101 Soo Chow Walk, off Upper Thomson Road and a stone's throw from the future Upper Thomson MRT Station. Zoned for commercial use within a two-storey envelope control streetblock plan, the property has five shop lots on the ground floor and a single large shop lot on the upper floor. Negotiations are ongoing with potential tenants.
The final component of the portfolio for sale comprises two adjoining corner strata commercial units at 1 & 1B Figaro Street, at the junction with Jalan Tua Kong. The units have two separate titles with 9,999-year leasehold tenure. Both units are leased.
Referring to the portfolio as a whole, Mr Poh said that all the vacant commercial space of the shophouses is under negotiation for lease, mostly to F&B operators. "The new owner has the option to continue with these ongoing negotiations or find its own tenants."
Some of the properties in the portfolio are held under special purpose vehicles (SPVs), but The Bamboo Group director Benjamin Gattie said that the preference was to do a divestment at the asset level to a single buyer.
"We want to keep it clean," said the 31-year old who started the group. Mr Gattie grew up in Singapore before heading to the US to pursue his education and later interned with a boutique real estate development company in New York. In 2009, he returned to Singapore and set up The Bamboo Group with funding from a group of core Singaporean investors.
"We decided to focus on freehold mixed-use shophouses in neighbourhoods undergoing transformation and with strong catchments. Instead of trying to compete with the big developers, we identified a niche where we could actively add value by creating innovative accommodation solutions and being hands-on in our approach to bringing in interesting F&B and retail concepts."
Cushman & Wakefield's Mr Poh noted that shophouses in good locations remain very much a favourite investment class asset given their limited supply. "Moreover, they offer stable income, capital appreciation and are relatively resilient to fluctuations in the property market."