A fresh face revamps 27-year-old Bugis landmark

Singapore

BUGIS Junction Towers is being refurbished so this 27-year-old office development can keep up with new projects coming up in the Beach Road/Rochor Road locale.

And that job is now being done by a fresh-faced and homegrown property investment outfit with ties to the Yeo Hiap Seng family.

The S$10 million revamp currently underway involves the lower facade of the 15-storey building, the main lobby along with the individual lift lobbies, and the interiors of lifts. Works are expected to be completed in the second half of this year.

"The new design reimagines the lower facade of the property, using Glass Fibre Reinforced Concrete (GFRC) to create a sculpted silhouette of a fluted sail. This is inspired by the maritime trading settlement established in the area about two centuries ago by the Bugis merchants from Sulawesi in Indonesia who were once well known for their seafaring skills," said Nicholas Yeo, director of TCRE Partners.

The homegrown company is the asset manager for Bugis Junction Towers. It also holds a minority stake in a consortium led by US-headquartered global alternative investment manager Angelo Gordon that acquired the asset for S$547.5 million in late 2019. The asset is on a a site with about 70 years' balance lease at the time.

The price worked out to S$2,200 per square foot on net lettable area of 248,853 sq ft, and a passing net yield of around 3.2 per cent based on the property's income back then.

The building has about 20,600 sq ft of office space on average for each of its 12 office floors.

Located above Bugis MRT interchange, the asset is now 98 per cent occupied. Major tenants include Enterprise Singapore, InterContinental Hotels Group and Beijing-based, Nasdaq-listed coworking operator Ucommune.

The most recent signing in the building was in March at S$9.20 psf gross monthly rental for a 2,400 sq ft space on a mid-floor.

The asset is part of a mixed development that also includes the InterContinental Singapore and Bugis Junction mall.

The refurbishment of Bugis Junction Towers is timely given competition from newer developments.

The most recently developed offices in the area are at Duo, a mixed-use project completed in stages between end-2016 and end-2017. The future Guoco Midtown integrated development along Beach Road as well as the next-door redevelopment of the Shaw Tower site will also include office components.

Mr Yeo, who is in his thirties, co-founded TCRE - a real estate investment and asset management outfit - in 2017, with Danny Koh, founder of Tower Capital Asia.

TCRE's shareholders are Y Developments (which is owned by Mr Yeo's family) and Mr Koh in his personal capacity. Mr Yeo is the son of Ben Yeo, the former managing director of engineering and property group Guthrie GTS. Mr Ben Yeo is a grandson of Yeo Keng Lian, who founded food and drinks manufacturer Yeo Hiap Seng.

In 2017, TCRE's shareholders took a majority stake in a consortium of Singaporean investors that acquired Angullia Development Pte Ltd, which developed the 54-unit TwentyOne Angullia Park upmarket condo project. At the point of the purchase, 28 apartments in the project remained unsold; the 36-storey freehold condo received Temporary Occupation Permit in April 2014.

"The 2016-2017 period was a very difficult time for the high-end residential sector in Singapore. It was in the doldrums. Both transaction volume and pricing were sharply lower compared with the high a decade earlier. Nonetheless, we had a strong conviction on the property's deep intrinsic value and we were willing to ride out the downturn," recalled Mr Yeo.

TCRE, as asset manager for Angullia Development, worked with owners of the other units in the condo to refurbish the common areas.

TCRE also spruced up the 28 units bought by the consortium. Select units were transformed into show apartments, complete with custom furnishings and fixtures.

"The July 2018 property cooling measures and the Covid-19 pandemic impacted sales, but we regained our footing subsequently," said Mr Yeo.

To date, all but one of the 28 units that the consortium bought at TwentyOne Angullia Park have been sold. This includes the three units moved this year at between S$4,040 psf and S$4,685 psf (for the show unit on the 33rd floor).

TCRE was also in the news for buying the distinctive barrel-shaped former Wangz Hotel at the corner of Outram and Tiong Bahru roads for S$46 million (or S$1.12 million per room) in August 2018, and reselling it a few months later at slightly over S$60 million upon receiving an unsolicited offer.

The group continues to look for opportunities in Singapore - in the residential, office, retail and hospitality segments.

"At the same time, we are carefully evaluating other developed markets which are underpinned by compelling economic growth fundamentals and a clear legal framework, such as cities in Japan, the UK and the US," said Mr Yeo.

Prior to co-founding TCRE, he worked at UBS and Alpha Investment Partners. A graduate of Columbia College, Columbia University in New York, he holds a Bachelor of Arts in economics, with a minor in fine art.

He does not have any grand target for TCRE, preferring to "focus on quality and not on scale".

"Buildings are more than empty shells; they are places with soul, where we live, work, play and love."

His team, which includes an architect, accountants and a former journalist/public relations professional, works tightly with building consultants to exceed investors' expectations and deliver results.

"But the process is equally important as the result; I am blessed to be able to enjoy both. This gives me the greatest satisfaction on the job."