Historic Moulmein Road site draws 13 bidders for master tenancy of cluster, with bids for monthly rent of up to S$388,800
Another tender for the commercial use of 20 heritage bungalows in Sembawang attracts five bids
[SINGAPORE] A state tender for a cluster of heritage properties in Moulmein Road drew a strong turnout when it closed in August, attracting 13 bids vying for master tenancy of the 44 buildings on the site.
The state-managed buildings stand in a park-like compound on a 985,350 square foot site with an estimated gross floor area (GFA) of 139,705 sq ft. Of the 44 buildings, 23 are subject to addition and alteration guidelines to retain the character of the site.
The other 21 buildings cannot be demolished, but are exempted from these guidelines.
The cluster was home to the National Centre for Infectious Diseases up to 2018, and supported Covid operations until it was returned to the state in 2023. It was put up for tender by the Singapore Land Authority (SLA) in May.
A compound has been envisioned as a “dynamic lifestyle hub” catering to families and multi-generational communities. Permitted uses include serviced apartments such as co-living spaces; wellness and fitness facilities such as outdoor pickleball or tennis courts; pet-friendly services; urban farms; an art gallery; and education programmes. About a third of the space is to be set aside for food and beverage (F&B) and retail outlets.
The 13 bids received exceeded expectations. Savills Singapore’s executive director of research and consultancy Alan Cheong said: “In view of the size of the land and a limited GFA, we were expecting about five bids.”
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The highest offer of S$388,800 a month came from Country City Investment, a property investment company which has, since 2007, managed parts of the SLA’s Dempsey Hill cluster, now an established a lifestyle enclave.
The lowest bid of S$18,889 a month came from S1F, an entity linked to contractor Sunray Woodcraft Construction.
Other bidders included Cherrylofts Resorts and Hotels (S$382,000), which had also bid in an earlier SLA tender for a holiday chalet site in Pasir Ris, and SA31 (S$290,000), an entity linked to IndoChine Group’s chief executive officer Michael Ma.
Developer TS Group offered S$168,000, and marina developer SUTL Enterprise bid S$160,661.
The tender evaluation will give 40 per cent weightage to the bid price, and 60 per cent to the concept quality. SLA said this is to encourage “compelling concepts and forward-looking proposals” from prospective tenderers.
Huttons Asia’s senior director of data analytics Lee Sze Teck said the site’s central Novena location likely fuelled the strong turnout.
Savills’ Cheong noted that the top bid of S$388,800 translates to about S$0.39 per sq ft (psf) on land, and S$2.78 psf a month on GFA.
In comparison, median retail rents in District 11 in Q2 were over S$8 to S$9 psf.
Cheong said: “Although the successful bidder will have to fork out capital expenditures and very likely have to reinstate the property to its original condition at the end of the lease, the base rent is still low enough to make it feasible.”
Overall, he predicts that the site could yield “something positive” for the occupier if the average passing rent is set at S$8 psf or more a month.
Noting that the cost of maintaining the grounds would be high, and that the tenancy was on a “5+4 tenure scheme” – that is, for a five-year term, renewable for another four – he added: “It is the additional four years that may form the bonus pool for the winner, because the time taken to renovate the project would eat up a significant chunk of the first five years of the lease.”
Over the last few years, the SLA has offered more heritage properties for private management, in a move to foster adaptive reuse and bring fresh commercial potential to Singapore’s older buildings.
Recent master tenancy tenders for SLA properties have attracted a wide range of investors and operators, drawn to the unique attributes of the state properties.
A co-living concept at 26 Evans Road pulled in a staggering 25 bids – an SLA record – in October 2023. It was eventually awarded to turnkey solutions provider Cover Projects, which submitted the second-highest bid of S$265,000 in a field that ranged from S$63,000 to S$319,000 a month.
Another state property in Kim Yam Road drew 11 bids when its tender closed in June 2022. The Lo & Behold Group, a hospitality F&B business founded by UOB’s Wee family scion Wee Teng Wen, won the tender despite its bid of S$400,000 a month being the second-lowest. The highest bid came from ACL Construction, at S$806,722.
Today, the site is home to New Bahru, a creative lifestyle hub that showcases homegrown brands in food, retail, art, wellness, and design.
In the north
A cluster of 20 heritage black-and-white bungalows in Sembawang was also offered earlier this year, in a tender that closed in June with five bids.
The top bid of S$56,000 a month came from construction company Eco Energy. The group won another state tender for a two-storey heritage shophouse on Hindoo Road – the first state-owned building to be repurposed for co-living – with a top bid of S$68,000 a month in August 2023.
Other bidders included TS Group (S$37,600), logistics and leasing company Peck Tiong Choon (S$31,500), and real estate group Top Global (S$8,008).
Rounding up the bids was A & C Consultancy with a bid of S$20 a month.
The two-storey black-and-white bungalows are in Admiralty Road, Falkland Road, Auckland Road West and Fiji Road. They sit on around 245,300 sq ft of land, with an estimated GFA of 94,945 sq ft. The tenancy is also on a 5+4 tenure scheme, similar to the Moulmein Road parcel.
Unlike Moulmein Road, however, the Sembawang properties are limited mainly to serviced apartment use, although up to 9,580 sq ft of GFA can be given over to F&B and retail use. Huttons’ Lee said this could explain the more moderate level of interest in the site.
The minimum stay for a serviced apartment is a week, and a hotel licence is not required.
SLA has also suggested multi-generational and senior co-living concepts for this site, to promote “senior living, active ageing and interaction and activities across generations”.
Wong Xian Yang, Cushman & Wakefield’s research head for Singapore and South-east Asia, said the majority of co-living developments are in the central region, not in suburbs such as Sembawang. The central location means operators can tap into a diverse tenant pool comprising professionals seeking proximity to the central business district and international students attending nearby universities.
“Given the lease tenure, the eventual winner is unlikely to embark on extensive capex works, and would likely prioritise bringing the site to be operationally ready,” he said.
The proposals for the two sites are being evaluated. The Moulmein Road tender is expected to be awarded on Nov 30, and the Sembawang site, on Oct 31.
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