LHN buys hotel property at 115 Geylang Road

LHN Limited has bought a 30-unit property at 115 Geylang Road for S$13.5 million, the company said on Wednesday.

It made the purchase through its indirect wholly-owned subsidiary Emerald Properties, funding the S$675,000 deposit through internal sources. The remaining balance, to be paid on the completion date of July 21, 2021, will be funded by internal sources and bank borrowings.

The property is currently being operated by the tenant as a hotel, under a three-year occupation agreement that commenced on Nov 15, 2020 without an option to renew. The address is listed online as the location of Gay World Hotel.

LHN will receive between S$28,350 and S$31,500 per month in rental from the current tenant under the agreement. The agreement can be terminated with at least three months' written notice from the tenant to the landlord, at least six months' notice from the landlord to the tenant, or payment in lieu of notice.

The Urban Redevelopment Authority of Singapore permits the property to be used as a boarding house with restaurant at the first storey. LHN intends to operate the property as a co-living space.

This will expand its portfolio of co-living properties in Singapore, increase the brand value of its Coliwoo brand, and provide potential capital appreciation and additional opportunities for the group to generate revenue, it said.

The 115 Geylang property is the second property that LHN has purchased this month. On April 13, it bought eight flats in Beach Road for S$16.8 million.

LHN shares closed at S$0.23 on Wednesday, down 0.5 Singapore cent or 2.13 per cent.