Spice trader's District 15 bungalow put up for auction

Singapore

A FREEHOLD District 15 bungalow in the Tanjong Katong area owned by the recently bankrupted managing director of spice and nut trader Pars Ram Brothers has been put up for auction as a mortgagee sale.

The indicative price of the property, at 85 Branksome Road, is about S$16 million, which translates to S$1,213 per square foot on the land area of 13,189 sq ft. On the site is a single-storey bungalow where Kirpa Ram Sharma, who was Pars Ram's managing director, once lived.

It will be offered at an auction on March 30 to be conducted by DTZ, the sole marketing agent for the property, at The Amara Hotel along Tanjong Pagar Road. The property has potential for redevelopment.

BT understands that the mortgagee (or lender) for 85 Branksome Road is United Overseas Bank.

Mortgagee sales occur when financially stretched borrowers face difficulties in repaying their loans and cannot secure buyers for their properties, resulting in banks repossessing these properties and putting them up for auction.

Under the Urban Redevelopment Authority's Master Plan 2014, 85 Branksome Road is zoned for residential use and is within a "two-storey bungalow landed housing" area. On site is a single-storey bungalow that is thought to be more than a decade old.

The flat, regular-shaped site boasts a 30-metre-long frontage. A potential buyer may be able to subdivide the plot for redevelopment into a pair of bungalows or semi-detached houses subject to approval from the authorities, DTZ said in a release.

"This would then represent an excellent opportunity for both occupiers and developers to own a property in a city-fringe location . . . Furthermore, there is the option of carrying out additional works to enhance the asset."

According to DTZ's head of auction, Joy Tan: "A landed housing redevelopment site of this size in . . . District 15 is rarely made available for mortgagee sale. The last known mortgagee sale was at least a decade ago."

There were two similar sized sites transacted in the locale last year - a 16,031 sq ft site at Wilkinson Road that changed hands at S$19.28 million (S$1,203 psf) and a 13,843 sq ft site at 25 Branksome Road that was sold for S$16.3 million (S$1,178 psf).

DTZ did not identify the owner or mortgagee of 85 Branksome Road.

Checks showed that the property is owned by Mr Sharma. BT reported earlier this week that Mr Sharma, his wife and son have been declared bankrupt, following the liquidation of their spice and nut trading business.

Mr Sharma, 60, had given personal guarantees to a number of banks for loans extended to Pars Ram Brothers, which was placed under provisional liquidation in Nov 24 last year. He was a director and major shareholder of the firm.

The Business Times understands that Mr Sharma, having liabilities of more than US$130 million, had filed for his own bankruptcy and was issued the order on Jan 28.

His wife and son were were also declared bankrupt after applications were filed against them by an Indian bank as they had acted as joint guarantors for the bank loans.

The company is said to owe money to between 10 and 17 banks.

Pars Ram Brothers was set up in 1937 by Mr Sharma's father. The firm is said to have had problems collecting payment from customers in the Middle East. There is also speculation that the firm was involved in speculative foreign exchange trades and was hit by market fluctuations.